Articles by Sean Casten

Coal utilities weigh in on the carbon policy

Something old, something new, something borrowed ...

For years, utilities have blurred the line between their interests and those of their customers (which are, under the rules of cost-plus rate-making, precisely opposed). Typically, this argument is used to frame rate cases in the form of, "if we can't raise rates on customer X, we'll be forced to raise rates on customer Y. Let us tell you how tragic that would be from customer Y's perspective, to cloud the fact that we're asking to increase rates on customer X."

I'm oversimplifying, but only just. Ameren is now applying this old idea to carbon policy, saying that the problem isn't what carbon policy will do to their shareholders (perish the thought!), but what it will do to their customers. Article from Restructuring Today ($ub req'd) below the fold:

FutureGen on at 5:00 p.m. Central, tonight

Fox News is doing a special report on the FutureGen project and -- rather remarkably -- couldn't find anyone to argue that $6500/kW coal-fired power coupled to a hydrogen plant is a dumb idea.

Then along came Grist, and this crazy blogger who thinks FutureGen is dopey. The interview was last Friday; they're running the coverage tonight, in advance of tomorrow's decision on whether Illinois or Texas will "win." (Nice plug for Grist here, eh? Apparently, nowhere else in the world can you find someone who won't sing the praises of this particular boondoggle.)

Now to see whether I look as smart as I think I am after editing ...

UPDATE: Watch the segment here.

GAO says the electric sector’s got a big subsidy to match

The GAO has reported on subsidies to our electric sector, proving what Grist readers already (sadly) know, namely that subsidies to the dirty folks vastly exceed existing or proposed subsidies to cleaner generation.

The most remarkable thing is that the biggest subsidies, like nuclear liability guarantees and lower debt costs through rate payer guarantees, aren't even included in the list (although, to the GAO's credit, it does acknowledge their existence).

So who's packing the biggest, er, subsidy?

Duke wins approval for a $3100/kW plant

From E&E News ($ub req'd): Indiana has approved a $2 billion, 630 MW integrated gasificiation/combined cycle coal plant.

Two billion divided by 630 MW = $3,174/kW.

If we assume that coal equity investors expect to recover their investment over 20 years, with an 11 percent return, that works out to 5.7 cents/kWh just to pay off the capital for the power plant. Add in another 3 cents or so for transmission and distribution, and a couple cents for fuel and operating costs, and this plant will work out to over 10 cents in retail prices.

This in a state where the current average retail electric rate is 6.79 cents/kWh.

So why was it approved? Simple:

"In the Midwest, coal is plentiful and low-cost, and finding ways to burn it cleanly is fundamental to meeting our customers' demand for power," Duke Energy Indiana President Jim Stanley said in a statement.

The head spins.

Excerpts of the story below the fold.