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UT study confirms market reality that natural gas, renewables most cost-effective new generation resources (10/26/18)

Today’s lede: University of Texas research allows policymakers and stakeholders to slice and dice data on new electricity generation costs . Updated data from the University of Texas Energy Institute confirms market trends indicating that renewables and natural gas offer the most cost-effective resources for new electricity generation.

“Researchers analyzed data for the most competitive sources of new electricity generation,” UT’s Energy Institute said in a press release. “Wind again proved to be the option with the lowest cost, on a levelized basis, for a broad swath of the country, from the High Plains, the Midwest and Texas, and even portions of the Northeast. Solar power is the cheapest technology in much of the Southwest, and, based on updated data, also in the eastern and northern regions of the U.S. Natural gas prevailed for much of the rest of the country.”

The new data updates the institute’s white paper, “New U.S. Power Costs: by County, with Environmental Externalities,” which is part of a comprehensive study, “Full Cost of Electricity (FCe-), issued in 2016. The research provides a series of maps reflecting shifting market conditions, a new policy environment and other factors affecting electricity generation costs in counties across the United States. The new version also offers the data according to congressional districts.

The institute also developed online calculators to foster “discussion among policymakers and others about the cost implications of policy actions associated with new electricity generation,” the institute said. “We think our methodology is sound and hope it encourages constructive dialogue,” said Joshua Rhodes, a research affiliate at the Energy Institute and lead author of the paper. “To enable this dialogue among stakeholders who disagree about the various cost factors, we’ve created tools to allow them to change the factors and observe the outcomes.”


Other electric industry news items of interest:

Termination of S.C. MOX fuels plant yet another setback for the U.S. nuclear sector. Shoddy construction, midprocess design changes and mismanagement have claimed another major nuclear energy project in the United States. Earlier this month the U.S. Department of Energy terminated construction of a facility in South Carolina designed to transform 34 metric tons of surplus military plutonium, enough for about 17,000 nuclear weapons, into fuel for nuclear power plants. DOE says the project is unnecessary and too expensive, while supporters say it is needed to keep a federal promise to move the plutonium cache out of state and to preserve 1,800 jobs at the site. The Aiken, S.C., project began in 2007 and was at least $2.6 billion over its $4.9 billion estimated cost and still years from completion. The cost escalations and delays were akin to those afflicting the pair of Westinghouse AP1000 nuclear reactors under construction in nearby Vogtle, Ga., and another pair killed last year at South Carolina’s VC Summer plant.

San Diego community choice aggregation program will be state’s largest yet. San Diego Mayor Kevin Faulconer announced Thursday he will pursue an alternative energy program that would see the city take over energy purchasing and price setting for residents and businesses. The city’s Climate Action Plan, proposed in 2014, states that San Diego must achieve 100 percent renewable energy by 2035, and community choice aggregation is laid out as one option to reach that goal. The mayor had entertained a second option proposed by SDG&E, but the utility withdrew its proposal in a letter on Monday. If approved by the City Council, San Diego’s community choice program would be the largest of its kind in the state. SDG&E would still take care of energy delivery, grid maintenance and customer billing. Nicole Capretz, executive director of the nonprofit Climate Action Campaign and a chief proponent of community choice, praised the mayor’s decision. “Today is a watershed moment that will transform both our energy and political systems,” she said in a statement. “It’s about the community taking control of our energy destiny and putting the public interest above corporate profits. We could not be more excited about this new day in San Diego.”

Dominion reframes rate incentive in S.C. utility acquisition bid. Dominion Energy’s latest offer to buy S.C. Electric & Gas includes dropping its offer of a $1,000 customer refund in exchange for reducing monthly bills even further. In a new filing with South Carolina’s utility regulators, the company says it is willing to cut SCE&G’s electricity rates by 14 percent from where they were earlier this year. That’s double its previous offer. The extra savings translates to about $10 more off a monthly bill for the typical home. The reduction is part of the debate over what the company will ultimately pay for SCE&G’s failed effort to build a pair of nuclear reactors at the V.C. Summer power plant north of Columbia. SCE&G ratepayers have pumped some $2 billion into the nuclear project, and they might be on the hook for billions more.

Michigan rate bill aimed at thwarting self-generation by Hemlock Semi-Conductors. Newly enacted legislation allowing the Michigan Public Service Commission to create long-term industrial electric load rates for specific industrial customers was a move aimed at Hemlock Semi-Conductors in Saginaw County, one of the largest electricity users in the state which has been examining developing its own power generation plant. With 7 percent of all Consumers Energy Co. power sales to Hemlock, Consumers warned it would have to raise rates to customers by more than 1 percent or more than $60 million to make up for the loss of Hemlock’s business. House Bill 5902 gives authority to the PSC to allow customized electricity rates for companies meeting certain criteria. Supporters of the legislation said the bill was necessary to block Hemlock from developing its own power generation plant.

Ohio PUC orders utilities to cut rates after tax cut. The Ohio body regulating utilities is directing those utilities to lower rates in light of last year’s federal corporate income tax cut – a process several utilities have already started. “The PUCO (Public Utilities Commission of Ohio) warned of penalties for utilities that fail to initiate the process for rate reductions,” an Ohio Consumers’ Counsel spokesman said in an email on the order. “Today the PUCO chairman announced that utilities must give Ohioans back ‘every dime’ the utilities over-collected for federal taxes,” Ohio Consumers’ Counsel Bruce Weston said in a statement. “I applaud this tough stance for consumer protection. And I appreciate the few utilities that have reached out to (the Office of Consumers’ Counsel) to settle-up for the benefit of their customers. We’ve been advocating that all utilities should reduce customers’ monthly bills to match the utilities’ reduced taxes.”

Pa. homeowner wins battle with zoning board over rooftop solar installation. Bill Hopping watched a work crew on Monday install solar panels on his Birmingham Township home, taking a small measure of satisfaction at the end of a year-long struggle with local authorities over renewable power. The crew scrambled for footholds on the slick, pitched metal roof, not unlike the slippery slope that Hopping and his wife, Yolanda, embarked on in 2017 when the Chester County town’s zoning board rejected their proposed system. It did not comply with rules prohibiting rooftop solar panels from being visible from the street. Hopping, a former corporate lawyer who now has a part-time private practice, sued the township, saying it could not constitutionally prohibit rooftop solar panels on purely aesthetic grounds. Both sides dug in for a long battle. But last month the township conceded and let the Hoppings install their $60,000 rooftop solar system on their Radley Run house, facing the street.

In wake of devastating hurricane, Puerto Rico contemplates 100 percent renewables. The Puerto Rican government is considering committing the island to a 100 percent renewable energy grid by 2050, according to a new plan introduced Wednesday. The plan, introduced as an adjustment to the territory’s energy bill by Governor Ricardo Rosselló, specifies that the island will stop the use of coal for electricity by 2028, prioritizing solar instead. The bill also would exempt solar panels for energy storage from sales tax.The bill “will guide a resilient, reliable and robust energy system, with fair rates and reasonable for all classes of consumers, making it possible for the user of the energy service to produce and participate in the generation of energy, facilitate interconnection of distributed generation and micro networks, and disaggregate and transform the electrical system to an open one,” according to the draft text.

Washington state regulators question Avista, Hydro One merger impacts. Washington state regulators spent more than four hours Tuesday asking questions to officials from Avista Utilities about their proposed merger with the Ontario-based company Hydro One. Utilities and Transportation Commission members have concerns with how the Spokane utility might be affected by moves made by the provincial government of Ontario. The concerns stemmed from a shakeup earlier this year in Hydro One’s board of directors, which came after voters elected a premier who promised to lower electric rates and cut executive pay. The board and CEO stepped down. “This is structured in a way that is durable and for the long term, and in a way it really didn’t matter what happened in Ontario around politics and boards and CEO’s. The issues that we’ve put in place in order to ensure that Avista maintains its ability to serve its customers, stakeholders, no matter who is on the board or who is CEO of Hydro One, and that is the critical piece to make sure it all works for us,” Avista CEO Scott Morris said in an interview with Spokane Public Radio.