The Future of Pedernales Electric

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The Future of Pedernales Electric
Energy Efficiency Renewables

• Briefing for PEC Board Candidates
• May 4, 2009

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Outline

• Current PEC EE/RE goals
• LCRA Contract
• Sandy Creek the risk of coal
• Nuclear Energy
• EE/RE Potential
• Model coop programs
• Financing

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Risks to PEC

• Growth in urban areas
• Declining rural area sales
• Global Warming
• Higher temperatures higher peak demand
• Declining water for cooling and pumping
• Increased cost of natural gas
• Lowered credit rating

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High Growth Areas
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Energy Regulatory Chief Says New Coal, Nuclear
Plants May Be Unnecessary

• No new nuclear or coal plants may ever be needed
  in the United States, the chairman of the Federal
  Energy Regulatory Commission said today.
• "We may not need any, ever," Jon Wellinghoff told
  reporters at a U.S. Energy Association forum.
• NY Times April 22, 2009

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Mitigating Risk

• Energy efficiency and renewable energy are widely
  recognized as the best energy options to reduce
  risk
• Ability to dispatch/deploy where they are needed
• Renewables provide power without pollution and
  raging fuel costs

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New PEC Energy Efficiency/Renewable Energy Goals

• 30 renewable energy by 2020
• 20 of new demand met with energy efficiency

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Take or Pay Contract Conundrum

• Most coops have contracts for 95-100 of their
  energy
• If demand is lower due to efficiency or onsite
  renewables, they still have to pay

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New LCRA ContractEE/RE Highlights

• Participation in Resource Planning
• Progressive Power

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What will PEC face when greenhouse gas emissions
are regulated?
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The Risk of Coal

• Global Warming/Federal greenhouse gas emissions
  legislation
• Financing Difficult to secure
• Fuel and fuel transportation price volatility
• Air Quality deteriorates
• Threat to human health
• Competition for Water
• NOx, SOx, Mercury, Particulate matter
• Lawsuits over new permits for Sandy Creek

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Big Risks for New Coal Plants, Ratepayers Will
Hurt if Built

• Construction Prices Up
• Coal Prices Up
• Interest Rates Up
• Uncertainty of Regulations, Carbon Costs
• Lower Demand in Slow Economy
• Potential for Price Squeeze

Slide Courtesy of
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Sandy Creek

• 900 MW
• Near Riesel, TX
• LS Power
• LCRA committed to 200 MW (22.28)
• 100 MW purchased power
• 100 MW equity ownership
• 2008 Dynegy (288 MW) reconsiders investment
• May not be able to finance Sandy Creek

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Sandy Creek pollutionby the numbers

• LCRA has signed a contract for 200 megawatts
• from Sandy Creek
• PEC, at approximately 30 of LCRAs electric
  load, would account for 60 MW of Sandy Creek
  power.

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What could PECs share of Sandy Creek and Fayette
cost in a carbon constrained world?
Pedernales total power cost for 2007
263,545,140
Does not include natural gas CO2 emission costs
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Nuclear

• Too cheap to meter
• Or the most expensive form of energy?

Comanche Peak cost estimate 27.6 billion South
Texas Project 22 billion Victoria
Exelon 22 billion
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Nuke plan may cost 22 billion
CPS Energy continues its silence on the price of
nuclear expansion plans, but a new study to be
unveiled today estimates that building two more
reactors in Bay City could cost 20 billion to
22 billion.
It is impossible to have an ideal market to
build a plant that complex, he said. There is a
significant financial and economic risk.
By Anton Caputo - Express-News 4/29/2009
The price tag for adding two new generating units
at the Comanche Peak nuclear power plant near
Glen Rose could be a staggering 23.8 billion to
27.6 billion, according to the author of a
report that raises concerns about the cost of new
nuclear facilities and a potential escalation in
electric rates.
In his report, Johnson said a "reasonable
estimate" of the cost of adding nuclear capacity
in Texas would be 7,000 to 8,130 per kilowatt.
Based on that, Luminants proposed addition of
3,400 megawatts of generating capacity at
Comanche Peak would cost 23.8 billion to 27.6
billion, Johnson said in a telephone conversation
with the Star-Telegram.
By JACK Z. SMITH Fort Worth Star-Telegram
4/29/2009
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Time/cost overruns
South Texas Project
Comanche Peak
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Nuclear Plants are Not Carbon-Free

• Total fossil fuel emissions from the fuel-cycle
  chain are typically unaccounted for
• Construction, mining, enrichment, waste
  management, deconstruction
• All are fossil fuel intensive industries
• Nuclear power is the slowest and costliest way
  to reduce CO2 emissions when compared to
  efficiency, distributed generation and some
  renewable resources. (False Promises, NIRS 2008)
• 1500 nuclear plants would have to be constructed
  worldwide to have a sizeable reduction in GHG
  (MIT study, 2003)

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Accounting for the nuclear cycle

• Nuclear power emits approximately 20-40 of the
  CO2 of a natural gas plant (False Promises)
• Oko Institut study 1.3 million tons of CO2 per
  year per plant.

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Peak Uranium/ Higher Greenhouse Gas cost

• High quality resources already being tapped
• Uranium with lower energetic quality means more
  energy consumed per kg of extracted uranium (van
  Leeuwen, 2006)
• Energy used to extract and enrich uranium has
  high carbon intensity

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CO2 emissions rise as uranium resource quality
decreases
Scenario 1 world capacity remains constant at 37
GW(e)
Scenario 2 world capacity increases 2-3/year
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What About France?

• France's nuclear power poster child has a money
  meltdown
• PARIS, FRANCE The myth of a successful nuclear
  power industry in France has melted into
  financial chaos.With it dies the corporate-hyped
  poster child for a "nuclear renaissance" of new
  reactor construction that is drowning in red ink
  and radioactive waste.
• Areva, France's nationally owned corporate atomic
  facade, has plunged into a deep financial crisis
  led by a devastating shortage of cash
• Delays and cost overruns continue to escalate at
  Areva's catastrophic Olkiluoto reactor
  construction project in Finland.
• Areva has admitted to a 2.2 billion, or 55,
  cost increase in the Finnish building site after
  three and a half years. The Flamanville project
  the only one now being built in France is
  already over 1 billion more expensive than
  projected after a single year under construction.
• In 2008, France's nuclear power output dropped
  0.1, while wind generation rose more than
  37.Attempts to build new French reactors in the
  US are meeting stiffened resistance. And the
  definitive failure of America's Yucca Mountain
  nuke waste dump mirrors France's parallel
  inability to deal with its own radioactive trash.
  
• (www.electricityforum.com/news/mar09/Arevafacingam
  oneymeltdown.html)

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What is Possible?

• Potential is Great
• For more
• Efficiency Renewables

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Current PEC EE/RE programs

• HVAC rebates 225-1000 per system
• Commercial lighting rebates 75-300
• Home Energy Center online resource tool

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Whats Out There?

• PUC Report on Energy Efficiency potential in
  Texas (the Itron Report)
• 23 of peak demand cost-effective
• American Council for an Energy Efficient Economy
  (ACEEE) 2007 Report
• 76-101 of demand growth can be met with
  efficiency, CHP, onsite renewable energy
• 23,000 jobs in DFW, Houston area alone

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Average consumer benefits from increased
investment in efficiency21 to 31
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ACEEE 2007 Report
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United Services CoopCleburne, TX

• Uniteds Online Energy Efficiency Store
• New resource provides one-stop shop for many of
  our members efficiency needs
• United members receive 20 discount on all
  energy-efficient products
• Conducted 1000 free energy audits in 2008

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Central Electric Power Coop (SC) EE potential
study

• The technical potential savings for electric
  energy efficiency measures is 32 of projected
  2017 MWh sales
• The achievable potential ranges from 5 to 22 of
  projected 2017 MWh sales (based on low, medium
  and high market penetration scenarios).
• The achievable cost effective potential ranges
  from 4 to 20 of projected 2017 MWh sales (based
  on low, medium and high market penetration
  scenarios).
• The maximum achievable cost-effective potential
  savings is 20. This high level of savings is the
  maximum available, is based on 80 market
  penetration, and could only be attained with very
  aggressive, well-designed and well-funded
  programs over a ten-year time period, and only if
  very high levels of market penetration can be
  achieved in South Carolina (similar to rates
  achieved in other regions of the US).

Final Report Updated 9/21/2007
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Iowa Coops

• The 11 million that Iowa co-ops invested in
  energy-efficiency programs last year will post a
  30.3 million return in energy savings. 
• 1,731 member-consumer-owners purchased geothermal
  and air source heat pumps
• Will save a total of  28,970,650 over the life
  of those systems
• The cooperatives will save 20,454,610. 
• http//www.nreca.org/AboutUs/CooperativeDifference
  /20081222Efficiency.htm

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Renewable Energy

• Large and Small Scale

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Renewable Energy Cost Trends
Levelized cost of energy in constant 20051
Source NREL Energy Analysis Office
(www.nrel.gov/analysis/docs/cost_curves_2005.ppt)
1These graphs are reflections of historical cost
trends NOT precise annual historical data. DRAFT
November 2005
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Solar Power Drain on Coop Resources or Funding
the Future?

• Concentrating Solar Power
• Centrally located renewable power plant
• Distributed Renewable Generation
• eg. solar panels on rooftops
• Member generated power
• Hedge against fuel price volatility

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Solar and electric demand
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Solar Costs and Benefits with greater incentives
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Kit Carson Electric CooperativeTaos, New Mexico

• Kit Carson Electric Cooperative received 5.4
  million in Clean Renewable Energy Bond authority
  from the federal government this year to launch
  small-scale solar projects including Taos, Rio
  Arriba and Colfax.
• A photovoltaic array at a community college is
  serving both as a source of power and as part of
  a renewable energy curriculum
• A radio station will be running on solar power
• Two schools are using photovoltaic arrays to
  power their sports field lighting and the
  scoreboard
• Installation of a large PV array at a brownfield
  site belonging to a mining company, turning the
  site into a green field
• Integrating a 140-kW array at the co-op's central
  office.

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30 MW Solar Plant (announced)Tri-State G T
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Delta-Montrose Electric Association

• Solar PV and solar water heater rebates
• Geothermal heat pumps financed through the coop

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New Hampshire Electric Coop

• For residential members, the co-op offers rebates
  for installing PV and small wind systems up to
  5,000
• Solar water heaters up to 1,500
• Geothermal heat pumps up to 4,000
• Converted fleet to hybrid or ultra-low sulfur
  fuel vehicles

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Funding the Future
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How do coops finance EE/RE?

• Rural Utilities Service
• National Rural Utilities Cooperative Finance
  Corporation (CFC)
• Bank for Cooperatives (CoBank)
• Commercial Banks (esp. JPMorgan Chase, Goldman
  Sachs)

• Bonding Authority CREB
• American Recover Reinvestment Act (the
  Stimulus)
• Partnerships with other public power
• Internal loan programs/member capital

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PURA 161.123

• An electric cooperative may
• (1) generate, acquire, and accumulate electric
  energy and transmit, distribute, sell, furnish,
  and dispose of that electric energy to its
  members only
• (2) assist its members only to wire their
  premises and install in those premises electrical
  and plumbing fixtures, machinery, supplies,
  apparatus, and equipment of any kind, and in
  connection with those activities
• (A) acquire, lease, sell, distribute, install,
  and repair electrical and plumbing fixtures,
  machinery, supplies, apparatus, and equipment of
  any kind an
• (B) receive, acquire, endorse, pledge, and
  dispose of notes, bonds, and other evidences of
  indebtedness
• (3) furnish to other electric cooperatives or
  their members electric energy, wiring facilities,
  electrical and plumbing equipment, and services
  that are convenient or useful and
• (4) establish, regulate, and collect rates,
  fees, rents, or other charges for electric energy
  or other facilities, supplies, equipment, or
  services furnished by the electric cooperative.

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2 year goals

• Solar goal
• PV installation
• Large-scale purchase (public power partnerships?)
  
• Energy efficiency retrofit programs for
• Homes
• Trailers
• Businesses
• Ranches
• New Homes program (Energy Star)
• Small business/ranch/local governments programs
• Loan programs (a la LoanSTAR)
• Stimulus money could be used to develop programs

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Questions?

• Tom Smitty Smith, Public Citizen
• smitty_at_citizen.org 512-477-1155
• Karen Hadden, SEED Coalition
• karen_at_seedcoalition.org 512-797-8481
• David Foster, Clean Water Action
• dfoster_at_cleanwater.org 512-474-0605
• Matthew Johnson, Public Citizen
• mjohnson_at_citizen.org 512-477-1155
• David Power, Public Citizen
• dpower_at_citizen.org 512-477-1155