By Laura McCarty
Director of Power Operations for Drift
You’re up to date on climate science. You believe in putting your money where the data are. You’re conscious in your buying choices. You’re aware of the expediency of market action to make serious changes that will lead to a more sustainable planet. You’ve signed up for verified green power. You’ve talked to friends and neighbors about how they can be involved. You’ve done it all, right? What else is there?
Get involved in your state utility commission meetings.
And here come the questions: Do I have one of those? Do sane people really attend inscrutable meetings about arcane energy rate design, generation sources and utility rules?
And here come the appeals: But I don’t have any idea what they’re talking about. But they go on and on about the most esoteric topics. But only “insiders” attend. But they meet way downtown, in the middle of the day, in windowless rooms, with hard-backed chairs.
Yes. I know. It seems unlikely that your state utility commission meetings are the next hip, happening hot-spot in the battle against rising CO2. But, trust me, they are. And it’s not just climate change at stake. IT’S YOUR POCKETBOOK!
In this entry, we’ll talk about one way in which your participation is vital to ensure your state commission’s rulings align with your climate AND financial interests. In upcoming entries, we’ll discuss other ways for you to ensure your commission is hearing your interests.
In December 2017 piece titled “Power Failure,” the Post & Courier of Charleston, South Carolina did a deep dive into the ins and outs of the types of decisions made by utility regulators that can and have led to billions being “torched” on poor decisions by state utility regulators.
Here are three recent examples called out in the piece:
- The V.C. Summer Nuclear Power Plant expansion in South Carolina has sunk $9 billion (of a projected project cost of $25 billion) “into two abandoned reactors that may never produce enough juice to run a nightlight.” It is estimated that one-fifth of affected electric bills – about $27/month are going to repay the debts on the now-abandoned expansion.
- The Vogtle nuclear plant in Georgia. This project was also estimated at approximately $25 billion. “In 2012, a construction expert hired by Georgia regulators sounded an early alarm [of project costs]. He issued the same warnings year after year as the overruns grew. But Georgia regulators approved one rate increase after another.” This project is still underway and slated for a completion of around 2023.
- The “clean coal” Kemper plant in Mississippi. The goal was to capture and sequester about 65% of the emissions. The project was beset with technical problems, until the owners gave up on the original plans. The plant will now be run as a gas plant. The original budget was $1.8 billion, ballooning up to $7.5 billion for an extraordinarily expensive gas plant. A similarly sized gas plant is estimated to cost about 1/10th the price of the Kemper plant.
Billions of dollars of overruns were passed on to consumers due to a utility-backed mechanism known as “Advanced Cost Recovery,” which is in effect in some form in at least 11 states. This mechanism puts ratepayers on the line, sometimes on untested technology, even before the plants are producing power versus the more “traditional way” of collecting revenue for the repayment of capital loans via approved rates for power used. Not to mention that many of these expensive new generation resources may not be in sync with customers’ demands for renewable energy sources.
Having your say when state regulators and state legislatures are enacting legislation and ruling on these types of issues can have an impact on regulators’ decisions. Finally, making your climate goals known to legislators and regulators is a sure way of reminding both bodies that their roles are to represent and advocate for their constituents.
So, pay attention to your state legislature’s energy subcommittees and proposed legislation. Find out when your state regulators are meeting to review rule-making on renewable energy interconnection rules and rates. There are often just a handful of citizens present at a utility commission meeting. When 50 or 100 or 200 show up, regulators notice. Whether or not you are allowed to generate your own solar electricity, how much you are paid for over-generation, whether your utility should be considering additional coal, gas or wind generation; these are the types of issues that you can influence.
But you gotta get involved!
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Laura McCarty is an energy trading and risk management (ETRM) specialist. She has over 30 years’ experience in commodities-trading business process and software implementation and integration. She joined Drift in April, after working at two of the “Big 5” Management Consultancies – Andersen Consulting (now Accenture) and Deloitte Consulting. Laura is now focused on transitioning the energy industry into a combined wholesale and retail marketplace where producers and consumers of energy have a transparent and level playing field on which to transact clean, renewable, distributed energy resources.