Updated. Batteries at Green Mountain Power: Beating the Peak

Batteries from Wikipedia
(Tesla battery images are proprietary)

Beating the Peak

I wrote recently about The Game of Peaks. This game is a business move, not a moral imperative.

Utilities pay a percentage of overall grid costs based on the percentage of power they use during the high-usage peak hour on the grid. Lowering their usage at that time can save significant amounts of money for the utility.

Note that "beating the peak" saves money for one utility, but the fixed costs of the grid remain the same.  If one utility beats the peak, another utility will pay more for the fixed costs of the grid. Beating the Peak has little to do with conservation, a clean grid, etc.  We are talking about cost shifting from one business to another.  It irritates me when utilities wrap themselves in "do-good" rhetoric about this cost shift plan.

I plan a series of posts about Vermont utilities and their various strategies for Beating the Peak.  I start today with the biggest utility (Green Mountain Power) which has the most high-tech strategy (batteries).

Green Mountain Power: We Have the Batteries

In an article in 2016, Green Mountain Power claims to have used batteries to reduce its peak power demand and save its customers $200,000 in an hour. We know that Green Mountain Power plans to use batteries to shave the peak this year, also, as described in their recent press release: During Hot Weather GMP Leveraging Stored Energy to Drive Down Peak Power Demand and Lower Costs for Customers  In the press release, GMP describes the use of solar power and batteries in terms of 5,000 homes powered by battery during the peak, and that GMP's power sources are 90% carbon free.

Complicated and slow

The battery story is a bit more complicated, actually. The press release above claims that Vermonters have installed nearly 500 Powerwall batteries in their homes...GMP can share access to stored energy to pull down power demand at key times... and drive down costs for all customers.

Actually, Green Mountain Power is not deploying its Tesla battery units as fast as it had hoped to do so.  Electrek reported in April that only 200 home Powerwalls had been installed out of 2000 that GMP planned to install. However, the article said that the utility was making some "big deals" (with commercial customers?) that would lead to more deployment.

If there were 200 batteries in April and 500 now, the pace of installation must have increased.  Here's how Electrek describes the arrangement GMP makes with its customers for Powerwalls: Under their agreement with the electric utility, homeowners who receive a Powerwall are able to use it for backup power for “$15 a month or a $1,500 one-time fee”, which is significantly less expensive the ~$7,000 cost of the device with installation, but in return, Green Mountain Power is able to access the energy in the pack to support its grid, like a virtual power plant.

UPDATE: Green Mountain Power has just claimed to have saved $500k during the recent heatwave, deploying "enough batteries to accomplish the equivalent of taking 5000 homes off the grid."  They also said they had deployed 500 Powerwall batteries.  In this case, my estimate of $1000 saved per battery (see below) would be correct.

However, as described in the article, GMP  also has solar storage facilities, access to electric vehicle chargers, and other methods of saving electricity. Because of the other methods of saving electricity, as well  the Powerwalls, my estimate of $1000 saved per battery is too high. Since there is no way for me to correct the estimate, I will stay with that estimate, but note that it is optimistic on the role of batteries.  Vermont Business Magazine: Stored energy helped GMP cave $500 K during heatwave. 


Math on the Batteries

Let's do some math.  If batteries "beat the peak" for Green Mountain Power, they could be cost effective.  Let's say GMP installs 1000 batteries, and each battery costs them $7,000 (true cost) minus $1,500 (cost the homeowner pays.)  So each battery costs Green Mountain Power $5,500.  With 1000 batteries, they will have invested $5.5 million dollars in batteries.

If GMP saves only $200,000 a year by beating-the-peak, it would take GMP about 27 years to make up the $5.5 million cost for the batteries.  Hopefully, they will actually save more, or perhaps they got a better deal on the batteries.

I'll look the calculation a different way, however.  In 2016, Green Mountain Power saved $200,000 a year with less than 200 batteries deployed. If GMP saves $1000 a year per battery, it will only take them 5.5 years to make up the costs of the batteries, which is a more reasonable payback time.


However, if  GMP deploys all 2000 batteries that they plan to use, will they be able to save $1000 per battery?  Will they be able to save $2 million in a year?

To answer this question, I would have to look at what they would pay for transmission without using the batteries. First, we need to know the overall grid costs for transmission.  That part is easy: ISO-NE expects to spend $700 million dollars on transmission this year.

Then comes the hard part: estimating Green Mountain Power's peak use compared to grid peak use.  I fear this would be a lot of speculation on my part. I don't know how much GMP would pay without the batteries. And by what percentage would the batteries cut demand?  Perhaps GMP could save $2 million a year on transmission costs, by using the batteries.  Perhaps they couldn't.  I will just leave the question out there.

Note: It is not clear how quickly the homeowner will make back their share ($1500) of the costs of the batteries.

My opinion of the GMP Strategy: Not very cost-effective. Not straightforward.

Cost: Batteries are an innovative way to shave a peak, but they don't look particularly cost-effective. They are okay, but even a six year payback is long, in terms of business calculations. And a six year payback was my most optimistic calculation.

Rhetoric: In my opinion, GMP's rhetoric about the batteries and the peak is misleading. Their press release is full of feel-good words about the environment, and nothing about how the money is saved --the "savings" is really a transfer of grid costs to other utilities.

Hello Governor Scott, and Goodbye Shumlin!

Governor Shumlin's Christmas Greetings

Governor Shumlin (soon to be ex-Governor Shumlin) has been a fierce and unremitting foe of Vermont Yankee.

Yeah, yeah, we know that.  But I was still surprised to see a story by Mike Faher breaking on Christmas Day this year. Here's the article in VTDigger December 26,  Shumlin: Vermont Better Off Without Nuclear Plant.  Two years after the plant closed, and Shumlin is still crowing about closing it?  This is what Shumlin wants to say, just before he exits from being Governor?

 From the article above, some quotes from Shumlin.

Windham County has an advantage for economic development because "We can do cash." (Cash from the Entergy settlement fund for economic development of Windham County.) 

Furthermore, Vermont is "an example of how to reduce your carbon footprint and do electric generation right." 

Here's my opinion of the real meaning of his statements:

• First, Shumlin is  the "we" in the first statement. Entergy's $10 million in cash for Windham Country redevelopment will not make up for the loss of Vermont Yankee's payroll of 600 people.  However, Vermont Yankee controlled its payroll, while the Governor of Vermont (Shumlin) makes the final decision on how the Entergy economic development funds will be spent.   Indeed, Shumlin has controlled more cash after Vermont Yankee closed than he controlled when it was operating.  Shumlin could "do cash." That was his version of "we."  
• Second, Vermont Yankee made 70% of the power made in Vermont.  Now, we import this power from the grid....adding some solar and some wind turbines in-state haven't exactly given us this power back. For Shumlin, "doing electric generation right" means that someone else generates the electricity, and they generate it somewhere else.

A Sad Anniversary

Yesterday was the second anniversary of the day that the plant went off-line forever,  December 29 2014.  My Facebook news feed includes many people sharing unhappy memories of the day. I did not enjoy reading Shumlin's cheerful words on Christmas Day as the anniversary approached.

I also encourage people to read my article about the consequences of the closing: Circles of Pain around Vermont Yankee Closing. 

Photo from the Phil Scott gubernatorial transition website

Goodbye to the Old Year

Some of my friends send me New Year Cards with the old Jewish saying:
Goodbye to the old year with all its curses: hello to the New Year with all its blessings.

A major blessing of the New Year is that Vermont's new Governor will be Governor Phil Scott.  I first heard of Phil Scott in 2010.  When Shumlin led the charge against Vermont Yankee in the Vermont Senate in 2010, then-Senator Scott was one of the four senators that voted to support the plant.  Twenty-six senators voted against, four voted for the plant.  Scott's vote was a profile in courage.  He urged the Senate to gather more information, and not just blindly charge to close the plant.

Here's the video of his remarks.




Governor Scott and A Party

And now, Scott will be Governor of Vermont!  Assuming the roads are clear, my husband and I are going to Governor Scott's inaugural ball next weekend. I don't  go to balls  and galas on a regular basis. However, until yesterday's deadline, anyone could buy a ticket.

In fairness to soon-to-be ex-Governor Shumlin, you could also buy a ticket to Shumlin's inaugural ball at the Sugarbush Ski Resort. Mary Powell, CEO of Green Mountain Power, was a major fundraiser for that ball.  I believe the ball was rather lavish.  Here's an older article that I wrote about the close ties between Shumlin and Green Mountain Power.  And here's an article in which Shay Totten wonders if it was just coincidence that Mary Powell raised $190,000 for the Governor's ball just before a Vermont agency needed to rule about a proposed Green Mountain Power wind farm. (Again in fairness, Shumlin's ball was a fundraiser for Vermont National Guard Charitable Foundation.)

Governor Scott's ball will be at a more modest venue: the Army Aviation Facility at the Burlington Airport.  Scott's ball will be a fundraiser for charities that support those who serve or have served in the military.  I plan to be there.

Vermont is not "better off without Vermont Yankee."  But Vermont will be better off without Peter Shumlin as Governor.  Hello, Governor Scott!

The Government Chooses the Electricity Supplier: Disturbing Trends in Vermont and New Hampshire

In Hanover New Hampshire

In New Hampshire, individuals and businesses can choose their electricity supplier, due to deregulation.  Some of the choices include:
Liberty Utilities
Unitil
Eversource (formerly PSNH)
New Hampshire Electric Co-op

However, Hanover, New Hampshire, home of Dartmouth College, hopes to be a Green Power Community.  It intends to achieve this goal by encouraging people to buy Green Power instead of the "brown power" (their words) supplied by regular utilities.  Specifically, Hanover wants you to sign up for their chosen Green Power utility:ENH, the Hanover Green Power Challenge supplier. Hanover hopes that  residents will sign up this utility, right on the link on the Hanover Town website. On the website, under Green Power Challenge FAQs,  there are these words:

Beginning on Thursday, May 14th, to sign up for the Green Power Challenge, simply paste the following website address into your browser. ENH has designed a website specifically for the Hanover Challenge: 
http://www.hanovernh.org/Pages/HanoverNH_BComm/shc/greenpower.  You will be able to fill out your customer registration via the website and ENH will take care of the rest.  The sign-up period closes on May 28th.

Most of the FAQ page on the town website is a carefully crafted sales pitch for signing up for ENH, including how easy it is to sign up, how your electricity won't be disconnected and reconnected, and the favorable rates you can get for twenty months.

From the ENH point of view, I am sure it is wonderful to see the Town be so pro-active for them.  ENH apparently cut a deal with the town to offer good rates, if the town would promote their product.

I wonder what Liberty Utilities thinks of all this?

In Vermont

As we saw during the lawsuits about Vermont Yankee, Vermont is a states-rights kind of state. (When the federal judges ruled for Entergy, several people in state government were quoted as saying it was a sad day for state's rights.) In Vermont, some towns want more say on energy siting  but the state Public Service Board process rolls right over them. In other words, we do things at the state level, here in Vermont.  We are choosing electricity vendors at the state level, too, though not as explicitly as having a link on the state website.

Instead, we just passed a law that pretty much forces our local utilities into the waiting arms of one vendor: Hydro-Quebec.  On May 25, John Herrick of Vermont Digger wrote a thorough article on an energy bill that was passed during the waning days of the legislative session: Legislative Wrap: State Passes Ambitious Renewable Energy Goal. Instead of reviewing the whole article (REC controversy and all), I just want to quote a few sentences: This bill requires that 55 percent of a utility’s electricity come from renewables, including large-scale hydro power, by 2017. The target increases the ratio to 75 percent by 2032.

Because of our excellent relationship with Hydro Quebec, Vermont passed a law saying that "big hydro" was counted as renewable energy.  I actually think big hydro should be counted as renewable energy, but counting it as renewable is somewhat unusual.

To evaluate the 55% renewable goal (in two years!) I tried to determine out how much renewable energy Vermont is using right now.  Alas, it is surprisingly hard to figure this out. The Governor's electricity page claims data from 2011.  It shows Vermont as having over 50% of its electricity from renewables: 37% from large hydro, 8% from small hydro, and the rest of the 50%  from wood, wind and "other."

Actually, I think that about 40% of Vermont's current electricity comes from hydro power: 10% in-state, and over 30% from Hydro Quebec. Green Mountain Power (GMP) seems to agree with me. On their Fuel Mix page for 2015, GMP shows 34% large hydro, 8% small hydro (adding up to 42%),  and they also show 44% "system power."  This chart is described as "after REC sales," so maybe they are not counting  the approximately 2% from wind?  I think that is what is happening.

A Green Mountain Power projection for the future (on page 4 of their ISO-NE presentation in March 2015) is another data point.  In describing this chart, GMP says that if they sell RECs from "premium renewables,"  the remaining power will be counted as system power. "Premium renewables" probably includes wind and in-state small hydro,

Okay.  It is pretty darn confusing, but it is clear that Vermont does not have 55% renewable energy now, and may have a hard time moving up to that mark by 2017.

Or maybe Vermont won't have a hard time.  Vermont's ace-in-the-hole is that we consider Big Hydro to be renewable, and other states don't.  So we can sell all our instate-renewable energy as RECs, and count their in-state production as  merely "system power." Under the new law, Vermont is required to have "55% renewables." However, it can meet this goal by buying more out-of-state Big Hydro.  Vermont would probably buy more from Hydro Quebec, the only game in town with lots of extra hydro power to sell.

In other words, in my opinion, Vermont's "ambitious renewable energy program" is almost a web-page link to Hydro Quebec.

Is this okay?

I grew up in Chicago, under "Richard J. Daley, Mayor." Frankly, it's a little late in life for me to act shocked about favorable treatment for favored vendors.

And yet, I think our local governments are breaking some new ground  in this regard. Town governments with links to one utility vendor and FAQs about how easy it will be to sign up with that vendor?  Passing a state law that pretty much requires purchases from an electricity vendor in a neighboring country?

I'm not shocked.  I admire the ingenuity.

Green Mountain Power receives $17 Million in Revenue Sharing from Vermont Yankee

Vermont Yankee

A deal is a deal, so Green Mountain Power gets the money

In 2010, Howard Shaffer and I debated two nuclear opponents on the subject of whether Vermont Yankee should keep operating.  One of the opponents was a very accomplished debater. He stuck to his talking point. He constantly re-iterated: A deal is a deal.  In his view, Vermont Yankee had a "deal" to operate for 40 years, end of story.

He was wrong. The actual Vermont Yankee deal means that Entergy will send a $17 million dollar check to Green Mountain Power. This is revenue sharing for the plant's operation past 2012. Operation past 2012 and revenue sharing were part of the state's agreement with Vermont Yankee.

The Vermont Yankee deal was signed in the Memorandum of Understanding by which Entergy bought the plant in 2002.  This agreement included financial arrangements for Vermont Yankee if it operated after 2012.

The Revenue Sharing Agreement

According to the Memorandum, if Vermont Yankee sold power at prices greater that $61 MWh (6.1 cents per kWh) after 2012, then Entergy had to split the "excess" payments with the utilities from whom Entergy had bought the plant. This revenue sharing was planned to last for ten years, through 2022. The price of 6.1 cents per kWh is sometimes called the "strike price."  It is the price at which the revenue sharing part of the deal kicks in.

Despite all the heartache, lawsuits, local utilities proudly saying they buy no power from Vermont Yankee, local utilities refusing to buy power from Vermont Yankee--Entergy is sticking to its part of the deal. Last year, the price on the grid rose, the revenue sharing kicked in, and Entergy is sharing revenue.

Last week, Entergy wrote a letter to Green Mountain Power saying that Entergy would pay almost $18 million dollars in revenue sharing to the utilities. This  sum was for revenue sharing for March 2013 through March 2014.  Terri Hallenbeck of Burlington Free Press broke the story: VY has parting present for GMP: $17M

What Will Happen to the Money?

According to the Green Mountain Power spokesperson Dorothy Schnure:“It’s great news for our customers...All the money we are entitled to will go to ratepayers.”

Some of us (like me) don't believe Schnure.  Seventeen million dollars is a sizable amount of money for a company with annual revenues of $240 million. More importantly, Green Mountain Power doesn't have a good track record about sharing windfall money.

Last time Green Mountain Power had a windfall, it was supposed to repay ratepayers for a loan.  Specifically, Green Mountain Power was supposed to refund $21 million dollars to ratepayers in the case of a utility merger.  Instead, Green Mountain Power kept the $21 million as a revolving fund. People can borrow from the fund for weatherization projects.

The AARP objected, saying that Green Mountain Power had broken its agreement, and that seniors in Vermont could use some actual money (not loans) in order to offset higher energy expenses.  The AARP was right, but the AARP lost .  A quote from the Vermont Digger article on the AARP appeal:  (Schnure) said, however, that the (Public Service Board, PSB) board had already gone to great lengths in its opinion to explain fully its reasons for denying AARP’s request that money go directly to ratepayers.

I doubt that the ratepayers will get Entergy's $17 million from Green Mountain Power, either. I think the utility will probably find some other way to use the money themselves, or have Efficiency Vermont use it. Green Mountain Power probably won't give it back to ratepayers, who would just spend it in dribs and drabs on whatever the ratepayers want to spend it on! How silly! (Okay, I know, sarcasm alert.)

But that is just my opinion. I'm a blogger. I have opinions.  Onwards to some facts.

Two  facts

First: the Revenue Sharing Agreement was worth something to the state of Vermont. The opponents of Vermont Yankee often claimed that grid prices would remain low for many years, and the revenue sharing agreement was worthless to Vermont.

They were wrong.  I doubt if they will apologize.

Second: This is the end or  close to the end for such payments. There may be another payment to Vermont utilities if local grid prices remain high between now and the end of the year.  But after that payment, there will be no more of these windfalls from Entergy to Vermont utilities.  As Hallenbeck described this payment: it was a "parting present" from VY to Green Mountain Power.

We can thank Entergy for the gift.  We can thank Entergy for living up to their obligations, once again.

We can thank Governor Shumlin and his supporters for the fact that this is a "parting" gift. (If we want to thank them, which I don't.)

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End notes:

"A deal is a deal" statements at the debate. See Howard Shaffer's December 2010 article at ANS Nuclear Cafe: Vermont's Nuclear Debate, Continued. 

Green Mountain Power will get most of this money, but some smaller utilities may also receive checks. The Department of Public Service will do the calculations, as described in the Hallenbeck article.

Obsessive readers of my blog may remember that Hallenbeck is the reporter who asked Governor Shumlin why he thought his memory of discussions about decommissioning was more important than what the state signed about decommissioning in the Memorandum of Understanding. In reply, Shumlin asked her if she was "working for Entergy today." You can hear the exchange in my 2011 blog post: In Vermont, Our Word is Our Bond, So We Don't Honor Contracts.

Green Mountain Power is a wholly-owned subsidiary of Gaz Metro of Canada.

Hydro Power in Vermont: The Expert's View

A few days ago, I posted about some controversial renewable energy projects in Vermont.   I didn't mention hydro projects.  Basically, I don't think in-state hydro is going to expand very much in Vermont.  Still, hydroelectric power is pretty important in New England, so I need to discuss it.

Here's my Vermont-centric description of the Future Of Hydro.

In-State Hydro Right Now

 Historically, Vermont receives about 10-12% of its power from in-state hydro. I show two charts that show this percentage.  One is about two years old, showing 11% in-state hydro in Vermont.

Vermont Electric Supply
From 2010 PSB Sustainability Presentation 

One is more recent, showing 12% in-state hydro for Green Mountain Power, which supplies over 70% of the electricity in this state.

From current Green Mountain Power web page on Fuel Mix.

Green Mountain Power (GMP) website's hydro page describes Vermont's long history of hydro power. GMP itself has a fleet of 32 hydro stations, many of which include recreation areas. There are about 80 active hydro sites in Vermont.

Views on New Hydro in Vermont's Future

I don't expect in-state hydro to expand very much in the future.

VPIRG and the Coalition for Energy Solutions: In 2009, VPIRG issued a report on Repowering Vermont, and the Coalition for Energy Solutions reviewed this in their own report Vermont Electric Power in Transition in early 2010. On hydro, the two reports pretty much agree.  The VPIRG report expects only 15 MW growth of in-state hydro. The Coalition report is not sure that even that amount of hydro expansion is feasible: When thinking about building many small dams, the effects on tourism should be considered. In general, small free-flowing streams are part of the Vermont landscape, and a great tourist draw...(Full disclosure: I am one of the authors of the Coalition report.)

Renewable Energy Vermont (REV) is upbeat about hydro, but they admit that By and large all existing dam sites in Vermont have already been developed, with no new projects commissioned since 1993. Environmental concerns, a burdensome licensing process and difficult economics have been primarily responsible for the lack of new dams coming on line.  Despite this, REV is hopeful about small, community-scale, run-of-the-river hydro.

Hydropower Illustration
From REV

In August 2010, the Burlington Free Press ran an article Hydroelectric dams resurgent in Vermont. It isn't much of a resurgence, though. This article is really about refurbishing: the two dams described as coming on-line soon are on the sites of existing dams, and together the dams would generate only 3 MW of power.

The same article says that  A 2008 report assembled by the Agency of Natural Resources published estimates in the 50 MW range, which it termed “broad-brush assessments.” (The report) also noted that Vermont’s stewardship of its water resources probably would supercede the licensing of any new hydro dams.

A Department of Public Service (DPS)  presentation in 2008 includes several projections of how much new hydro is available in Vermont.  The numbers range from 25 MW to 322 MW. The DPS projection says that 25 MW can be built.  The high projection is from the Department of Energy: this estimate stands alone with so big a number, and seems to be based on the idea that every river, stream and brook in Vermont would have a hydro plant.

In Conclusion: Very Little New Hydro For Vermont

 I think that existing dams in Vermont will be refurbished and upgraded, with some increase in power supply.  Estimates of 15 to 25 MW seem reasonable to me.  As a whole, I think the state of Vermont will follow the guidance of the Agency of Natural Resources report:

Vermont’s stewardship of its water resources probably would supercede the licensing of any new hydro dams.

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Hydro Outside of Vermont

As far as I can tell, while existing dam sites are being refurbished, the national trend is not in favor of more hydro projects. In the United States, hydro seems as likely to be dismantled as to be built. A year ago, for example, the Hydro Review website ran an article by Elizabeth Ingram: Exploring the Reasons behind Dam Removal.  The dams that were removed were located in the western United States.  Nearer to home,  the Edwards Dam was removed in Maine, in 1999, on the basis that it interfered with fish migration.

Low-head hydro that does not require a dam is much discussed. However,  I find few examples of such systems being built, perhaps because the economics are unfavorable.  Refurbishing an existing dam site is the most common way of adding hydro capacity at this time. If I am wrong about this, I hope my readers will correct me.

Hongping Hydro Station, China

Small hydro is being greatly expanded in China.

Further Reading:

To read about the biggest Vermont in-state hydro sites, I recommend Bob Hargraves post on the Energy Safari visit to Comerford Dam.

The five hydro plants on the Connecticut River are due for relicensing, and hearings will begin soon.  However, these plants are not counted as in-state hydro for Vermont. The Connecticut River is the border between Vermont and New Hampshire, but the state of Vermont begins at our shoreline, not in the middle of the river.  So New Hampshire has the hydro plants as well as responsibility for the bridges.

The Oversold Smart Grid: Dismissing the Work of Women

Comes the Smart Grid

On Friday, most of the members of the Coalition for Energy Solutions attended a Jones Seminar at the Thayer School of Engineering at Dartmouth.  The topic was Harnessing Distributed Flexible Resources for Sustainable Electric Energy Systems and the speaker was Dr. Johanna Matheiu of the ETH Power Systems Laboratory in Zurich.

Dr. Matheiu was a clear and well-organized speaker.  Most of her talk was about methods of damping out short term fluctuations in the grid due to intermittent power providers.  The fluctuations she was concerned about were short-term: changes in wind speed, clouds over the sun.  When asked about long-term issues (the wind blows more at night when the demand for power is low anyway), she made some suggestions such as pumped storage.  Among other things, she suggested running clothes dryers late at night.

I don't blame her for this suggestion.  It is what everyone suggests.  For example, my local Green Mountain Power ad for their upcoming smart grid suggests that washing machines be run at three in the morning.  It's right there in the commercial.



Comes the Revolution?

Three in the morning?  Really?

I have been married for over forty years, and we raised two children.  I have run many loads of laundry in my time.  I know something about laundry.  Laundry doesn't "do itself" at three in the morning.  If laundry is running at three in the morning, someone is running it.

Doing laundry requires human intervention:

• If wet clothes sit around in the washing machine for a long time before being transferred to the dryer, the clothes are likely to grow some serious wrinkles.  
• When the dryer finishes, it signals (buzzes) so you can retrieve the clothes and hang them up quickly.  This is important, unless you don't mind looking as if you slept in your clothes.  

from Wikipedia

Every dryer I have owned for the past twenty years had a "cool-down" part of the cycle to prevent wrinkles, plus an end-of-cycle buzzer.  The dryers usually also have some kind of wrinkle-saver feature: the dryer keeps tossing the clothes about and buzzing yet again, so if you don't catch the first end-of-cycle signal, you will still have clothes that aren't wrinkled.  These are pretty important features for most women.  I remember the old days before permanent press fabrics and dryer-cycles.  It was all about ironing.  I still do some ironing on occasion, but not nearly as much as I did when I was first married.

In my opinion, this business of dryers running in the wee hours of the morning is simply insulting to the work that (mostly women) do in order to keep their households in clean clothes, sheets and towels. The assumption seems to be that such human work is not necessary.  The washing machine will run itself.

Unless, perhaps, comes-the-smart-grid-revolution, fabrics will also be quite different, quite high-tech, and  these fabrics will be able to sit around in washing machines and dryers for hours without getting wrinkled.  (I'm not holding my breath.)  Also, these amazing new fabrics (if they are planned for the smart grid) are never mentioned in the ads.

Midnight and Laundry

First of all, I want to say that I try to spare the grid.  For example, it is quite painless to start the dishwasher around ten at night instead of starting it right after dinner.  I also avoid doing laundry at truly prime-time.  I would welcome some level of time-of-day pricing, so more people would avoid stressing the grid.

But still it puzzles me: why all this emphasis on laundry-at-midnight?

I finally figured it out. Laundry at midnight is pretty much the only activity that seems to be available for time-of-day shifting.

Midnight and Real People

 It would be over-the-top to suggest that people cook meals at three a.m., go to baseball night games that start at three a.m. and so forth.  People won't do this. Some parts of our social structure need to work all night (hospitals, police stations, freeway gas stations, some industrial processes). These already operate all night.  Shifting other processes to midnight doesn't usually work out well.

For example, when my husband worked for a start-up digital mapping company, they decided to add a midnight shift of digitizers (map-makers).  Unfortunately, after a few months, they realized that the quality of the maps produced on the graveyard shift was much worse than maps from other shifts. The graveyard shift maps often required expensive reworking. It turned out to be more cost-effective to add workstations and workers in daylight hours.  I think other companies have made similar discoveries, over time.

In other words, humans are daylight creatures, not nocturnal.  When busily over-selling the smart grid, the sellers run right up against that fact. Somehow, they think midnight laundry is the solution.

Midnight laundry is not the solution.  Suggesting that clothes should be washed at three a.m. is insulting to the work of running a household.  Suggesting that clothes wash themselves is equally insulting.

Almost as important, this suggestion is an insulting oversimplification of the challenges of running a stable grid.

Note: I mentioned Dr. Mathieu's comments about the dryer to show how pervasive the "midnight laundry" idea seems to be.  Dr. Mathieu herself is doing research about the smart grid, not overselling it.  Green Mountain Power, on the other hand, is over-selling it.

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The Carnival of Nuclear Energy #151 is at Next Big Future today.  It has relatively few links, and they are all significant. The economics of small modular reactors, Arnie Gundersen's less-than-amazing career in the nuclear industry, future prices of natural gas, planting apple trees and building nuclear plants to benefit future generations, a moving memorial to Ted Rockwell, and carbon-counting in Canada. Well worth a visit!

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.

The Gaz Metro Merger: The Consumers Are Not Being Protected

About the Public Service Board

In my most recent post, I urged people to look at the questions the Public Service Board (PSB) has asked Vermont Yankee, and make comments to the Board.

In today's post, I show that the Public Service Board and the Department of Public Service have not protected consumers about other utility issues. This post was published first in True North Reports, and is updated here. When we write the PSB about Vermont Yankee, it is worth knowing some related history.

If you don't have time to keep reading this post, here's the summary:

Question: Are Vermont consumers being protected by the Public Service Board (PSB) and the Department of Public Service (DSP)?

Answer: No

The Merger

Green Mountain Power (owned by Gaz Metro) plans to merge with Central Vermont Public Service. If this merger is approved, Gaz Metro, a Canadian gas pipeline company will own or control most of the energy infrastructure in Vermont. They will own the two electric distribution companies and the gas distribution company (Vermont Gas Systems). They will also (probably) control the two large transmission companies, TRANSCO and VELCO.

The Agencies That Protect Consumers in Vermont

Vermont has two agencies that regulate utilities and protect consumers. Vermont’s Public Service Board (PSB) oversees utility actions and sets rates. The Department of Public Service (DPS) acts as the consumer advocate in cases before the PSB. If these two agencies do their job, Vermont citizens should feel comfortable, no matter who owns the utilities.

Unfortunately, PSB and DPS are not doing their job to protect ordinary citizens and ratepayers.

Conflict of Interest at DPS

DPS is charged with protecting consumers, and many people are concerned with Shumlin’s appointment of Liz Miller as Commissioner of the DPS. Ms. Miller’s husband is managing partner of the law firm that represents Green Mountain Power, a conflict of interest situation that puts her actions as Commissioner in doubt.

Senator Vince Illuzzi was particularly concerned that Miller would not be able to do an appropriate job of supervising the merger. A major issue is preventing Green Mountain Power having monopoly control of the transmission companies. Such control by one massive company could hurt all smaller utilities. Illuzzi filed interventions at both the federal and state levels, asking for an independent counsel to supervise the merger. Many small Vermont utilities joined his interventions.

In response, the state appointed Michael Dworkin to study the matter. Dworkin made some recommendations on managing the transmission companies. Meanwhile, Ms. Miller said that the governor expected DPS to “kick the tires” on the merger deal.

However, even the appearance of conflict of interest can make DPS actions look biased. No matter how fair Miller tries to be, and how many tires she kicks, she is a Commissioner whose husband’s law firm represents one of the biggest players in the merger. Dworkin only studied one aspect of the merger case: the transmission companies. There are other issues about companies that Gaz Metro owns or will own, and these issues directly affect consumers.

Regulating the Pipeline

Gaz Metro (owner of Green Mountain Power) had another docket before the PSB recently. Gaz Metro plans to expand its Vermont Gas Supply pipeline from Burlington to Rutland. The docket before the PSB included the question: whose money will be used for this expansion? Surprisingly, PSB has allowed the pipeline company to raise rates on existing customers in order to extend the pipeline from Burlington to Rutland.

Not everyone of the PSB was in favor of raising the rates to consumers before the pipeline is built. Board member John Burke said that taxing Vermont ratepayers before they get any benefit was "unfair and improper.” Burke pointed out that Gaz Metro has hundreds of millions of dollars available for investment. He was overruled by the others on the board. Existing customers will pay for the new pipeline, even though these customers are already served by a pipeline. Existing customers will see higher gas rates, but will have no personal benefit from the pipeline expansion. The benefit goes to Gaz Metro, which will be able to build a longer pipeline without spending its own money.

Update: Gaz Metro just negotiated a $600 million dollar line of credit agreement. They have plenty of money to build the pipeline without being financed by Vermont ratepayers.

DPS, the designated protector of the consumer, did not take a stand on this case before the PSB.

Following Some Old Money on the Merger

There are other situations in which the ratepayers are not being protected. Since DPS did not step in to protect consumers, AARP is intervening about electric rates in the proposed GMP-CVPS merger.

To understand the AARP intervention, we have to follow some old money. Years ago, the PSB granted Central Vermont Public Service a rate increase, but the PSB stipulated they had to give that money back to the shareholders and rate-payers if their company was purchased. Half the rate increase money was to return to the shareholders, and half to the ratepayers. Since Central Vermont Public Service (CVPS) is now expecting to be purchased by Green Mountain Power, CVPS is obligated to give the money back to these two groups.

CVPS plans to give immediate per-share payments of $10 to their shareholders (share-holders half) while paying back the rate-payers by lowered rates due to the supposed $114 million savings from the merger over a 10 year period (rate-payers half).

Paying back the rate-payers through merger-caused savings is not going to be real money, not like a $10 bill in the shareholder’s pocket. PSB recently gave CVPS a rate increase of 4.8%, or approximately $17 million per year.

This new higher rate will more than offset the $11 million dollar per year “savings due to the merger” that CVPS expects to pass on to customers. AARP is intervening in the merger docket to protect low-income seniors (and everyone else). The DPS has not intervened.

DPS has not intervened to urge the PSB to protect the ratepayers in the gas pipeline or CVPS returning money they are obligated to return to ratepayers. Why not?

Update: The latest updates from AARP imply that the consumer rebate situation is even worse than I described. Two links:

• an article in Vermont Digger shows DPS intervened to make the merger look better (without changing the terms).
• an op-ed yesterday from the AARP asking Gaz Metro/GMP to pay its debts.

Conflict and the Appearance of Conflict

Conflict of interest is impossible to prove. If the Commissioner were not married to a lawyer whose firm represents Green Mountain Power, the DPS might well have taken the same stands. DPS might have approved of pipeline financing by existing customers. They might have been fine with CVPS plans to return money to shareholders with a check and return money to ratepayers through questionable future savings. No one can say that DPS acted this way because of this, or because of that.

However, once again, we are back to the reasons that governments and judges attempt to avoid even the appearance of conflict of interest. With conflict of interest in the background, all decisions the government makes have the possible taint of bias.

Governor Shumlin is an astute politician, and he should take notice of these concerns. For any rate case involving a current or potential subsidiary of Gaz Metro, owner of Green Mountain Power, Governor Shumlin should appoint an independent counsel as consumer watchdog. He should ask Ms. Miller to step aside for that case, since her husband is an executive in a law firm representing Green Mountain Power. The independent counsel should do some serious watching over consumer pocketbooks!

If he does not take this type of action, Shumlin is just handing ammunition to his opponents.

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Earlier articles in this blog have described concerns with this merger. The probable monopoly ownership was covered in Who Owns the Infrastructure. Some conflict of interest concerns were covered in Governor Shumlin and GMP. This article focuses on the probable effect of these mergers on consumers.

I wrote this post for True North Reports. I am grateful for the opportunity to reprint in this blog.

Nimby and Nukes: Vermont Utility Makes a Deal with Seabrook

The Deal

Yesterday Green Mountain Power (GMP) announced a deal to buy electricity from Seabrook Station in New Hampshire. The deal was at a very good price, 4.66 cents per kWh, less than Vermont Yankee's recent offer price of 4.9 cents, and far less than the 5.8 cents from Hydro-Quebec that led to general rejoicing earlier this year.

The amount of power purchased from Seabrook varies between 15 and 60 MW from year to year. In 2012, GMP will buy 15 MW of power from Seabrook. This amount goes up to 60 MW in 2015. According to the article, GMP now buys 100 MW from Vermont Yankee. (GMP and Central Vermont Public Service share most of the approximately 200 MW that Vermont Yankee supplies to Vermont.)

The GMP-Seabrook contract is for 23 years. However, Seabrook's license is up in twenty years. Seabrook, like Vermont Yankee, is a top-performing plant and New Hampshire doesn't have an Act 160. So I guess signing for twenty-three years is okay for a plant in New Hampshire. Assuming they continue to operate well and get an NRC license renewal, New Hampshire will not stop Seabrook from operating.

There is Still A Big Hole in the Power Supply

So, approximately 60 MW of the 200 MW of Vermont Yankee's instate power will now be replaced by Seabrook power at good price. In Vermont, rejoicing has begun, as shown by Emerson Lynn's post A Nuke Deal for Vermont: the Price is Right at Vermont Tiger. With low prices for IBM, IBM will stay in Vermont. So will Green Mountain Coffee Roasters. The price in this contract is certainly right, but it is a price I am sure Vermont Yankee could match.

Still, 60 MW purchased from Seabrook instead of 600 available from Vermont Yankee (counting the power used by the neighboring states) leaves a significant hole in the power available to the grid. Once again, I use the Department of Public Service graph for electricity supply for Vermont to illustrate.

The filled-in areas in the chart below are committed resources. There's a lot of blank space, not filled in, to the right of 2012. Seabrook's 60 MW is not going to fill it.

Also, in my opinion, the power supply situation is worse than it appears on this chart. Note that the light-blue area near the top expands from almost nothing right now to about 500 GWh in 2016. This is wind energy. But wind energy is simply not coming on-line quite that fast, as I see it. Also, recent studies have shown that capacity factors for inland wind farms are far lower than expected. In a recent blog by Willem Post at the Energy Collective, he notes that measured wind turbine capacity factors in Maine and Vermont have been about half of what might be expected. Therefore, in my opinion, this chart overstates the amount of wind energy that will be available within three to five years.

As usual, double-click on the chart to see a bigger version.

Have We Been Saved By Seabrook?

I don't think so. I am delighted that we will be getting some power, clean reliable nuclear power, at a good price from our neighboring power plant. This may keep the price of electricity down in the region. It will certainly help lower the price of electricity sold by Green Mountain Power. (I buy my power from Green Mountain Power, so I'm happy!) However, there's going to be a lot of power bought at the market prices if Vermont Yankee closes, which is why we have this quote from Green Mountain Power.

"This power contract isn't about Vermont Yankee," said Mary Powell, president of Green Mountain Power. "As we all know, Vermont Yankee is trying to work its way through their challenges, from a legal and regulatory perspective. If they manage their way through that, we've always seen that it would be our desire to have conversations with them."

Jobs and Vermont Yankee

I like to see the emphasis on low electricity prices to keep jobs in Vermont. However, I need to point out that the two major studies of the effect of closing Vermont Yankee did not address the effect of electricity prices on jobs. These reports only looked at job loss and tax loss from shuttering the plant. These reports are the Legislature's Consensus Report, and the IBEW Economic Report, which I have mentioned many times in the past. Their conclusions are that if Vermont Yankee closes:

• Job loss is estimated at 1100 to 1300 jobs.
• Revenue loss is $60 to $93 million a year
• Tax loss is $6 to $12 million a year.

These facts have not changed.

Closing Vermont Yankee will still have a devastating effect on the economy of southern Vermont. This is true even if we buy some power at a good rate from another nuclear plant.

End Note: I had a post yesterday at ANS Nuclear Cafe about solar and the grid. I feel that people need to understand the role of the grid in net-zero solar installations.

Update: Art Woolf blogged at Vermont Tiger yesterday about this purchase and reliability. Woolf's post started with James Moore's of VPIRG's statement: We’d prefer to see our state’s utilities moving away from all forms of dirty and unreliable power, including nuclear energy.

Second Update: NEI Nuclear Notes also has a good post on this: Replacing the Foot You Shot Yourself In.

Image of Seabrook Station from Wikipedia

Vermont Committed Power chart from Presentation by Dave Lamont of Vermont Department of Public Service, March 2011

Entergy, Vermont Utilities, and Methane from Canada

Utilities in Vermont: Whom Do They Serve?

In a previous blog post, I described the flap that ensued when Entergy announced that they had completed negotiations with Vermont Electric Cooperative (VEC). Entergy made this announcement before the VEC board had approved the contract. I suggested that the announcement wasn't about the VEC deal as much as it was about signalling other utilities that Vermont Yankee would sell power below market rates.

Who were these other utilities? There are two big utilities in Vermont: Central Vermont Public Service (CVPS) and Green Mountain Power (GMP). These utilities basically provide transmission and distribution services, and are regulated by the Public Service Board.

Rate Relief for Utilities

About two years ago, I attended a hearing about Vermont Yankee at one of the legislative committees. GMP and CVPS representatives testified. The legislators asked the GMP and CVPS representatives what would happen if Vermont Yankee would go on a prolonged outage before March 2012?

The utilities answered they carried "outage insurance" (for unexpected outages) on Vermont Yankee, and they would use this insurance to pay the differential between Yankee rates and grid rates. However, the insurance covered only a fixed time. If Vermont Yankee stayed off-line for a longer period, the utilities would have to appeal to the Public Service Board for "emergency rate relief." They would ask the Public Service Board for permission to raise rates to their customers, with very little warning.

I expect such a request for rate relief would have been granted.

Since the Public Service Board can give rate relief to the utilities, the utilities do not have to worry overmuch about being squeezed between high-cost providers and low-paying customers. Consequently, the utilities do not have a bottom-line requirement to get the cheapest rates possible.

However, the utilities are supervised by the Public Service Board, and the Board has the best interests of the ratepayers at heart. At least, I hope so.

CVPS and Vermont Yankee

In recent days, the two major utilities in Vermont have said they do not plan to buy power Entergy. As quoted by Shay Totten in the 7days blog, Bob Young, CEO of CVPS said:

"We concluded that there were four conditions if we were to sign a deal: NRC approval of relicensing; the sale of the plant to a new owner; an agreement for Entergy to sell 20 megawatts in Vermont in addition to sales to CV and GMP; and state approval of the decommissioning and any other issues of interest to the state...It has been our position that we would not enter into a formal contract absent a sale and tacit state approval of any proposed deal."

I have been following the story of Vermont Yankee pretty closely, and this is the first time I had heard of CVPS saying that Entergy needed to sell the plant before CVPS would buy power from it, or that Entergy needed to sell 20 MW in Vermont to groups besides CVPS and GMP. If anyone can tell me an earlier time these requirements were announced, I would be grateful. I had heard that CVPS and GMP preferred if the plant had another owner, but not that CVPS required the sale before buying power. In my opinion, by stating that "we won't buy from THAT company, no matter how cheap and reliable the power is" CVPS is abandoning their duty to obtain low-priced reliable power for ratepayers.

Green Mountain Power and Vermont Yankee

On the other hand "we won't buy" is exactly what I would have expected to hear from Green Mountain Power. After all, they are a wholly-owned subsidiary of a Canadian gas company, GazMetro. Governor Shumlin wants to close Vermont Yankee, but he strongly supports wind turbines and the expansion of natural gas pipelines into Vermont. Green Mountain Power's parent company will undoubtedly make more money from selling Canadian gas to Vermont than Green Mountain Power would make by selling less-expensive Vermont Yankee power to Vermont.

By the way, while it was relatively easy to find a "we will not buy from Entergy" quote from the president of CVPS, I have not been able to find an equivalent "we will not buy" quote from the president of Green Mountain Power. However, I saw an email from the president of GMP which said GMP had found other sources of power through 2016.

Out of State?

If the Entergy press release was signaling low prices to Vermont utilities, the utility statements above make it clear that Vermont utilities don't care about low prices. Maybe they get granted "rate relief" a little too easily?

The statements from CVPS and GMP have been new to some of us, but I am sure they weren't new to Entergy. I believe this attitude of the Vermont utilities is the background to Wayne Leonard's statements, made in a conference call in February. (Emphasis added by blogger.)

In an investor conference call on February 08, 2011, Entergy's CEO, Wayne Leonard, made these comments: Efforts also continue to secure a new power purchase agreement with the Vermont Utilities. Negotiations had been ongoing for some time now, and we have made progress toward reaching agreement on key terms and conditions that would provide citizens of Vermont continued access to clean and affordable power. However, while we would certainly prefer to sell power in state, that is not a necessary condition, of course.

None of this is good for Vermont. Utilities that don't care about price. A big in-state provider that is looking out-of-state for customers.

I think the Vermont legislature has now put Vermont rate-payers in the odd position that even if the plant continues to operate, people in Vermont will not get the financial benefits of the low-cost power.

Bunsen burner flame types from Wikimedia