Another Name for Methane: The Microgrid for Vermont

Sudden Press about the "Microgrid"

Natural gas

In the past two days, articles about NRG and the supposed New Generation have been coming thick and fast.

At the national level, NRG and HuffPo are starting a joint venture called Generation Change: Together We Will Be Heard. This forum is going to have "realer than real" dialog about energy, including the new "solar power that has evolved from large roof top panels limited to industrial buildings to ones that are compact, portable and charge our phones, cameras and tablets."

Okay, yeah, confusing.

At the Vermont local level, there's a joint venture between NRG and the Gaz Metro's wholly-owned subsidiary, Green Mountain Power (GMP).  As Vermont Digger reported:  GMP Teams With National Energy Company to Build Microgrids.

The story is clearer locally, but the story is not fun.

The NRG CEO takes a stand for Natural Gas

The Vermont Digger story quotes NRG CEO David Crane about these planned microgrids.  He says that  "the best form of energy storage is natural gas. "

Huh huh huh? Now methane is energy storage?

Traditional not-smart solar

Let me explain this, by referencing to the comment stream on this article (which is terrific). In the comments, people in favor of microgrids and people against microgrids all ask the same question:  Exactly HOW does natural gas come into this?

Finally, one comment link explains it. The link is to this article, with more extensive quotes from the NRG CEO. NRG Energy Deploying Dean Kamen’s Solar-Smart In-Home Generator.

Note the clever title "Solar Smart Generator." Solar and smart!  How wonderful.

55KW Stirling Generator
Wikipedia
Smart Solar?

If you continue to read, however, you find that Solar-Smart is a Stirling engine running on natural gas. It is sized for the home. And somehow, it's all about Hurricane Sandy.

I gather that NRG's goal is for every home to have its own Stirling engine and a natural gas connection.  The end-quote on the Solar-Smart article is from NRG CEO David Crane:  “The solar industry belongs with the natural gas industry -- those industries go together. They just don’t know it yet.”

 Side Note: It's a large company, but not everyone has heard of NRG. Wikipedia describes their business areas as including co-generation, renewable energy, and renewables. The company owns many fossil-fired plants, some wind farms, and part of a nuclear plant.  The core company was part of Houston Lighting and Power. It has expanded by many acquisitions.

The GMP CEO takes a stand against electricity distribution

Now, back to Vermont.  In the Vermont Digger article, we see that the CEO of GMP is in line with this "your very own Stirling engine" idea. (I guess that is why she's teaming up with NRG on microgrids.)  In the article, GMP CEO Mary Power  described the current energy infrastructure as “archaic” and made up of “twigs and twine” that will cost the nation tens of billions of dollars over the next decade.

The CEO of Green Mountain Power Seems pretty cavalier about the current grid. Doesn't sound eager to maintain that old "twigs and twine" system.   This is even though she heads a DISTRIBUTION utility, for heaven's sake!   What is she doing saying stuff like this? Does she want to see the archaic grid disappear, along with GMP and her job?

GMP may lose, but Gaz Metro will win

Of course not. In my opinion, CEO Mary Powell's  job is safe.  After all, she works for Gaz Metro.  GMP is a wholly-owned subsidiary of Gaz Metro. We Vermonters forget that at our peril.

Even if Powell doesn't bother much about the grid in Vermont, her parent company can do very well. Gaz Metro can hope to put in lots of gas pipelines for those microgrid Stirling engines.

Vermonters may lose, but the state government will win

"Twigs and Twine"
Wonder what GMP linemen
think of Ms. Powell's statement?

A wonderful thing about natural gas is you can raise the taxes almost infinitely.  Vermont put tax after tax on Vermont Yankee, and Vermont Yankee decided to close down. Vermont slapped a $12 million generation tax on Vermont Yankee. Meanwhile, through its revenue sharing agreement,  the plant was already on the hook for $18 million in revenue sharing with the local utilities.

Sending the state and utilities a total of $30 million dollars in a year is a lot for a small plant. As an oversimplification, taxing Vermont Yankee to that extent made its profits lower and its power less competitive.  This was one of the reasons it closed, in my opinion.

Raising Taxes for the State

With gas pipelines, raising taxes is just so easy.  You can force a gas pipeline to pay, say, $30 million a year in taxes...no problem. The pipeline will just go to the PSB and ask for a rate increase.  People won't stop buying the product (natural gas) just because the price went up. For heating your home, home, fuel oil and propane will probably still be more expensive than natural gas.  Also, once you use  natural gas, there may well be a cost to retrofitting your home furnace for another fuel.

What about the electric utilities? Aren't they price sensitive? Well, no.  Merchant plants sell into a market and they are price sensitive.  But the distribution utilities are regulated, and they get more money by the simple expedient of asking for it.  Let's face it.  New coal or nuclear aren't in the cards. Renewables, though subsidized, aren't cheap either.

Basically, as long as gas remains cheaper than oil, the sky will be the limit on how much distribution utilities will be willing to pay for gas-fired electricity. Even if gas is highly taxed and expensive, the distribution utilities will buy it. After all, the distribution utilities can't go broke, as long as they can go to the PSB, explain the situation, and get a rate increase.

The Winners and The Losers

So, with this great leap forward of a mutual aid pact between Gaz Metro and NRG, who are the winners and the losers?

Winners:

• Gaz Metro (sells more gas)
• GMP (sells more gas, after all, it is Gaz Metro)
• State administration. The state can tax the pipelines as much as they want to tax them, and the consumers will pay.

Losers:

• Vermont consumers who want reliable power. They want someone to keep repairing those sticks and that twine.
• Vermont consumers who want affordable power. The mixture of high-priced gas, stealth gas taxes and few merchant plants will mean "bye-bye to affordable."
• Any sincere environmentalist who is living painfully off the grid with solar panels, a wood stove, a bunch of batteries, and a vegetable garden. This person just didn't know how easy it is to be green with natural gas, the new storage.