Thursday, October 29, 2009

Politicians Express Concerns About Cap & Trade

Interesting video, a compilation of statements from US elected officials about climate change legislation.

Tuesday, October 20, 2009

AEI Reaction to Boxer-Kerry Climate Bill

SOURCE: American Enterprise Institute


At more than 800 pages, it will take a while to digest fully the actual workings of the Boxer-Kerry climate bill, but on the surface one should examine what is meant in practical terms by the claim that it is a tougher bill than Waxman-Markey because it calls for a 20 percent reduction in greenhouse gas (GHG) emissions from the 2005 level by the year 2020--barely a decade away--instead of the 17 percent reduction in Waxman-Markey.

A 20 percent reduction, meant literally, would reduce U.S. GHG emissions to a level last seen in the year 1977, when the U.S. had a population of 220 million people (as opposed to 305 million today), and when its economy was only half the size it is today ($7.2 trillion in 1977 versus $14.2 trillion today, in constant 2008 dollars). In 1977, the United States had 145 million vehicles on the road; today, it has 251 million vehicles on the road.
To meet this target will require substantial cutbacks in the use of fossil fuels, and their replacement by low-carbon or non-carbon energy sources that are often three to five times more expensive than fossil fuels. If the transportation sector is going to cut its share of emissions back to the 1977 level, cars and trucks will need to reduce their total miles traveled at least by one-third, or achieve a fleet-wide one-third improvement in fuel efficiency, which is a difficult and expensive proposition to achieve in ten years' time, given the length of time consumers and businesses keep their cars and trucks today.

The amount of coal burned for electricity would have to be cut by more than half to return coal-related GHG emissions to their 1977 level, requiring the closing of more than 200 coal-fired power plants, reducing electricity supply by more than 800 million megawatts. (In 1977, the electric utility sector burned 477 million tons of coal. In 2005, the utilities burned just over 1 billion tons of coal.) Wind and solar power are three to four times as expensive as coal-fired electricity, and moreover the total amount of electricity currently generated by non-hydro renewables (solar, wind, geothermal, etc) is only about 130,000 megawatts. We hear that renewables are a fast-growing source of power, but at its "rapid" growth rate of the last five years it will take 97 years for renewable sources to make up the amount of coal-fired electricity that must be taken offline over the next decade. In other words, the deployment of costly wind and solar and other renewable sources will have to increase by an order of magnitude. This is not a credible scenario by 2020. This is especially not credible if the bill caps the price of emissions allowances at $28 a ton as the bill proposes.

The industrial and manufacturing sectors, by the way, have lower greenhouse gas emissions today than they did in 1977--a testament to the substantial progress in energy efficiency in that sector over the last 30 years. All of the growth in GHG emissions over the last 30 years has come from increased transportation and electricity consumption by households.
Boxer-Kerry will surely follow Waxman-Markey in making heavy use of "offsets" that will mean, in practice, that there will be very little GHG emissions reductions at all by 2020. Rather than inconvenience American households and industry, we shall "offset" emissions by counting tree-planting and regular agriculture activities on our carbon balance sheet in a way that would make Enron or Bernie Madoff proud. If there were truth-in-advertising for climate legislation, the Boxer-Kerry bill would have to strike the "20 percent reduction by 2020" claim.

Tuesday, October 13, 2009

Johanns Keynote Speech Highlights Agriculture, Including Impact of Climate Change

The following information is a portion of a keynote speech delivered by Senator Mike Johanns to the American Enterprise Institute in Washington, DC. His speech discussed the need to support agriculture, and his remarks included the impact that climate change/cap & trade legislation will have on farmers.

Read on below. A link to the entire keynote speech follows at the bottom of this blog entry if you would like to read it in its entirety.

From Johanns:
American agriculture can continue to feed the world, and our farmers will continue to care for the land, as long as we don't erect roadblocks every step of the way.

"This includes policies that would make their jobs more difficult. By far, the most glaring example of such a policy is Cap-and-Trade. There has been much discussion in both houses of Congress about potential new legislation and regulations relating to climate change. Any cap-and-trade law would have sweeping consequences that touch every corner of American life. There are various studies floating around about its potential impact.

"Recently, a study by Texas A&M University revealed several shortcomings of the House Cap-and-Trade bill that passed in June. The study, which analyzed a sampling of representative farms across the country, showed that 71 of those 98 representative farms would lose money as a result of cap and trade. So, based on this example, three out of every four farms lose at best.

"While the study did show some net-gainers in agriculture, it indicated that the benefits are largely the result of higher grain prices, not because of lucrative carbon payments. These higher grain prices translate into higher costs for the livestock sector. Not only do costs go up, but acres also come out of production under cap-and-trade programs. So, as supply decreases, we could also see higher food prices.

"The Senate cap-and-trade bill is even more radical than the House bill. It will lead to higher taxes, higher energy costs, a tighter squeeze on disposable income, more lost jobs and lower standards of living. Regardless of the approach, the bottom line is, the cost of doing business goes up, and supply goes down.

"What's more, EPA Administrator Lisa Jackson has openly admitted that U.S. action alone will have little, if any, effect on our climate. And we would clearly be acting alone - the U.S. cannot force China and India to adopt a Cap-and-Trade regime. So basically, we would be raising energy prices for every American family and business with no significant impact on the global climate.

"And agriculture gets hit the hardest. A farm family's pocket book can only stretch so far, and with costs of production already on the rise, this proposal could put family farms at risk of going under. There is no way around that. If Cap-and-Trade passes, some of our farmers and ranchers - the people who feed the world - will be put out of business.

"Some farms that have been in a family for four, five, and six generations will have to shut down their operations. That means production goes down and people lose jobs. And I will also tell you, once you put something like this in place, it is hard to unwind. That is why I have been very vocal about my concerns.

"During the budget debate, I asked the Senate to vote twice to ensure that cap-and-trade legislation is not slipped into law using budget maneuvers - once on an amendment and once on instructing conferees. Both passed with overwhelming, bipartisan support - almost 70 percent of the U.S. Senate.

"Recognizing the need for further debate, I have twice sent letters to the Senate Agriculture Committee, on which I serve, requesting hearings on this issue. I was pleased when a hearing was held in July, and another took place in September. I was also very pleased when new Agriculture Committee Chair Blanche Lincoln said last week that she intends to hold a mark-up of the Cap-and-Trade bill.

"That's something I have long advocated for, and it will be a critical piece to making sure agriculture's voice is heard during this debate. Cap and trade legislation will touch industries across the spectrum in America, and quite frankly will increase costs for many of them. As government officials, we have a responsibility to seek a full understanding of the impact of any legislation we pass. This is especially true during trying economic times.

"I will continue to seek more analysis, and call for more hearings to reveal in full the increases in input costs that would result from cap and trade. The House rushed and passed a bad bill. Hopefully, the Senate will be more thoughtful in its approach and take the time necessary to understand the consequences. "I would offer a couple thoughts in conclusion. Agriculture is getting hit from all sides, yet it seems like few people are taking the time to step back and look at the facts. Pesticides and fertilizers help protect the crop and increase production, thereby feeding the world. A massive shift to lower-yielding organic production would have severe consequences. Organics simply cannot feed the world.

"Cap-and-Trade would shift an estimated 20 percent of our productive farmland to trees. Again dramatically reducing supply while providing no benefit. What you are doing today is incredibly important, and if I can leave you with one message, it's this: stay informed and engaged.

"There is a lot of misinformation out there, and that becomes a serious concern when you realize some of these policies mean people will lose jobs and others will go hungry. It's that simple, but it doesn't seem to be sinking-in with the White House or some of the leadership in Congress. I will continue speaking up for the American farmer and rancher, and I hope you will as well."

If you would like to share your thoughts with Senator Johanns or Senator Ben Nelson on the climate change bill, you may do so here.

If you would like to read Johann's full set of keynote speech highlights, you may do so here.

Wednesday, September 23, 2009

Sorting Through the "Hot Air"

With the cooler weather making its way into South Central Nebraska recently, we have noticed that ads are beginning to appear in local newspapers touting the benefits of space heaters. Some of the products advertised make claims that in the end cannot add up to the savings promised to the consumer. This issue is one for which we received many calls from our customers last winter, and these calls are beginning to come in again this fall.

The question we are asked from space heater users is this..."Where are the savings I was promised from my heater?"

First of all, you will not see a reduction in your heating expenses if you use the portable heater 24/7. Consider this...typical portable heaters utilize 1,500 watts, and for every hour you use the heater, you will spend about 9 cents. Doesn't sound like much does it? But consider these figures. If you use that heater one hour per day every day for a month, you will pay $2.70. Again this does not seem like a tremendous expense. But if you use the heater 24 hours a day, seven days a week, you will have added around $65 to your monthly electric bill. If you use more than one heater 24/7, you will double that amount!

If your goal in purchasing a portable heater was to reduce your expenses, then this is probably not what you had in mind when you purchased it!

In order for you to save money using a space heater, you must lower the thermostat on your whole house furnace, and use the space heater in the single room you are occupying in your home. Then set your space heater to a temperature that keeps you comfortable in that room.

Last year we had numerous calls from customers who did not see the savings they were expecting from their portable heater. In a few cases, customers had purchased more than one heater and used two or even three of them around the clock.

If you are considering the purchase of a portable heater, we urge you to be wary of outrageous claims for savings on heating. If you have any questions, please contact Southern Power District or your local energy supplier.

According to the U.S. Consumer Product Safety Commission, more than 25,000 residential fires occur every year due to space heaters. These fires result in 300 deaths, and emergency care for an estimated 6,000 people. If you are using a heater, please consider these important safety tips:

  • When selecting a space heater, look for one that has been tested and certified by a nationally-recognized testing laboratory (Underwriters Laboratory).
  • Keep children and pets away from space heaters. Some heaters have very hot surfaces.

  • Keep doors open to the rest of the house if you are using an unvented fuel-burning space heater. This helps to prevent pollutant build-up and promotes proper combustion. Even vented heaters require ventilation for proper combustion.

  • Never leave a space heater on when you go to sleep or leave the area.

  • Never use or store flammable liquids (such as gasoline or household cleaners) around a space heater.

  • Place heaters at least three feet away from objects such as bedding, furniture and drapes.

  • Never use heaters to dry clothes or shoes.

Tuesday, August 25, 2009

Challenges Great in Wind Generation

With Southern Power District's involvement in the Our Energy, Our Future campaign, we have been continuously asked by our customers “Why hasn’t Nebraska put up more wind turbines?”

We do understand why this question is so common, after all wind is free, right? When you take a look around at other states there are certainly a lot more wind turbines popping up on the landscape. Its working there, so why not here? Some people feel that Nebraska has “balked” at the idea of adding wind generation.

The fact is that Nebraska IS taking a hard look at putting into place an extensive wind generation system. During the 2009 Nebraska Legislature Session, Interim Study Resolution LR 83 was introduced, which calls for a study of issues related to expanding the development of wind energy in Nebraska. Of importance within this study is preserving Nebraska’s public power system which serves our consumers with low-cost, reliable electricity—two factors that cannot be ignored.

The study examines the expected outcome for building 7,800 megawatts of wind power for use in Nebraska and for export out of state. To put that into perspective, all of Nebraska’s existing generation sources are nearly equal to this number. The intent is to harness wind resources in Nebraska and transport that generation to parts of the country where wind is not as abundant.

In order to get a project such as this up and running, the size of the investment will, shall we say…knock the wind out of you! The cost to build the wind generation facilities themselves is estimated at $16.38 BILLION. (That's right...billion with a letter "B".) This does not include the expense of a transmission system to transport the wind generated power, which would tack on an additional $3.9 billion. Added together, this gigantic bill would equal over $20 BILLION, or over $11,000 per Nebraskan.

How then, have our neighboring states been able to justify the cost to put up this type of generation? First of all, Nebraska is an all public power system and the tax incentives that were available for our neighboring states are not available here. While public power districts do not exist to make money from electric consumers, the lack of this incentive makes wind projects less feasible when considering affordability for our consumers. Secondly, many of these projects are owned by private investors who are seeking profits. The added cost is likely captured from the end-user in the form of higher rates.

Returning to the idea to develop a large-scale wind generation project in Nebraska, consider a few questions. First of all, who will pay for a $20 billion project? Can you afford $11,000 to get the ball rolling?

Secondly, if private investors come into the picture on a large scale wind project, much of that power will be consumed right here in Nebraska. Who do you feel will see the benefits of a wind generation system funded by private investment? I personally do not feel it will be the end-use electric consumer.

Here is another big problem. This large scale wind generation project would seek to export energy to other states. In May of this year, governors from 10 Northeast and Mid-Atlantic states delivered a letter to US Senate and House Majority and Minority Leaders. In this letter, the governors expressed a strong interest in developing wind generation in their own backyard, rather than paying the added transmission cost that I mentioned previously. How comfortable are you with spending $20 billion to provide a service, for which we may not have a “buyer”?

If you would like to read for yourself the results of this study, I do encourage you to take a look at the white papers outlining the details. The information does outline both the benefits and risks of a large scale wind project, and I think in reading the materials you will see that the challenges are monumental.

LeAnne Doose,
Communications Director, SPD

Thursday, August 13, 2009

Revenue Shortfalls & Energy Efficiency

This morning at 7:00 AM I was awaken by the typical sound of my alarm clock radio blaring into my ear. The radio station my alarm is set to typically runs through the current news at this time every morning. As much as I despise the sound of that alarm clock, its part of the structured routine that gets me going every day. But, today was different. There was something within the news report today that really caught my ear.

What caught my interest was a story announcing that Nebraska Public Power District (NPPD) is projecting a revenue shortfall this year of about $30 million. (Read this article if you'd like to know more). NPPD officials say that a record-cool July and the poor economy are contributing factors to this shortfall. This is news I have heard behind the scenes in recent days so that was not really a surprise to me.

What really captured my attention was the conversation about this issue that continued after the news report was read. The on-air personalities provided some brief comments about this story and noted that utilities promote the use of less energy through efficiency measures. They also commented that using less electricity results in revenue shortfalls, such as NPPD is seeing this year.

These comments brought to mind the image of customers scratching their heads in bewilderment, wondering why public power districts would try to sell you LESS of the product that they produce and distribute. Most businesses or organizations that produce a product or provide a service would never even think about promoting LESS use of their product or service. AND, despite the fact that our wholesale provider has experienced shortfalls in revenue, we are going to continue urging our customers to be efficient, or use less electricity. If you weren’t bewildered before, are you now?

Let me say first of all that the revenue shortfall is not due to the efforts that customers are taking to use their electricity more efficiently. The cool temperatures and rainfall in July dramatically affected the overall use of electricity in irrigation services and cooling. Plus, the price for the excess energy that NPPD typically sells has dropped this year due to the economy. These issues combined added up to the $30 million shortfall now being reported by NPPD.

Now, back to energy conservation. Why on earth would we continue to urge our customers to use less electricity? I have often heard it said that “the cheapest kilowatt hour is the one that you do not have to produce”. In other words, keeping the demand for electricity down will delay the need for the addition of new generation. Adding new sources of generation is costly. Given all the factors that come into play to determine your rates, taking steps to use less energy in your home, business or on the farm will make a POSITIVE difference in the future. So, we are not going to ask you to swap out the CFL's you've put into place in your home for a less efficient incandescent bulb. If you are taking steps to become more energy efficient, keep up the good work!

The revenue shortfall announced by NPPD is one that will impact rates. We will be watching this closely and you can follow any new updates on Southern’s Rate Watch page.

LeAnne Doose,
Communications Director, SPD

Tuesday, July 28, 2009


Many years ago in school, I recall several occasions where I did not read or fully read my assignment for English class (please accept my apologies Mrs. Engelhardt). At the time I had what I felt to be a number of reasonable explanations for my lack of preparedness. One of my most common excuses was that I was not given enough time to review the assignment handed down by my teacher. Looking back at those years, I now realize that the problem was…(GASP)…ME! I admit, I had a number of other priorities in my life at the time that I felt far outweighed the importance of getting through a chapter of Romeo & Juliet or Crime & Punishment as assigned by my English teacher. But the next day, when called upon in class, I still remember the pit in my stomach as I struggled to come up with an intelligent thought that applied in any way to the book that the rest of the class had read.

As I have watched the events of the Waxman-Markey climate change legislation unfold in recent months, I have been taken back to those years in school when I was “unprepared”. As I watched the news reports tell the story of the climate change bill vote on June 26th, I couldn’t help but wonder how many US Congressmen found themselves to have that same pit in their stomach that I had in English class.

Had they read their assignment, all 1,400 pages of it? I seriously doubt it, considering in this case that a good chunk of their assignment came in the form of an amendment handed out hours before their vote was requested.

Had any of these Congressmen gone for “extra credit” and listened to their constituents concerns for affordability and reliability of electricity? I can assume that many didn’t. In spite of this lack of preparedness, 219 of our Congressmen voted in favor of the bill, even though they hadn’t done their homework. Thankfully our Congressmen in Nebraska went into this vote with an understanding of the outcome for their constituents and voted “NO”.

Now, it is time for a new “class”, our US Senate, to step up and study this bill. Will there be any star pupils in this class that will actually read the bill? Today I have done some reading and may have found that person that every teacher longs for in his or her class, and that is Senator James Inhofe of Oklahoma, who is a ranking member of the Senate Environment and Public Works Committee.

This Senator has stated that he ACTUALLY INTENDS TO STUDY the climate change bill, and not only that, has vowed to report on every single page of the damaging provisions that are outlined within. He provided a report to the Senate on July 27th, which he summarized by saying that “at the end of the nearly 1,400 pages of taxes and mandates, we see the stark reality of this bill: it sends pink slips to workers and then promises the unemployed that they will get assistance from the government”. Given this undesirable outcome, let’s hope that the rest of our US Senate makes it to the end of their “reading assignment”.

There is another group of students that needs to do their homework on Waxman-Markey, and that is all electric consumers, which includes you! I mentioned above that our elected officials can go for “extra credit” by listening to their constituents, and that is where you come in.

YOUR ASSIGNMENT: Talk to our Senators, Mike Johanns and Ben Nelson. Let them know that you value affordable electricity, and that you are concerned about any further blows to our economy by further job losses. Log on today to and talk to them through the Our Energy, Our Future campaign.

LeAnne Doose,
Communications Director, Southern Power District