Tag Archives: renewable energy

11.20.21
by

Renewable Energy: At What Cost?

Easy answers are rarely wise answers, especially when complex systems are involved. So it is with the current push to move to a “100% renewable standard” in Columbia. That move could significantly raise our costs of electric service.

In general, using renewable resources costs more (average costs reported in the 2021 Columbia Water & Light Renewable Energy Plan were $36.51.MWH for renewable and $25.86/MWH for non-renewables). In recommending a move to a “100% renewable standard”, the Integrated Electric Resource Master Plan Task Force failed to present any analysis of the cost of doing so, although it did acknowledge that cost might be an issue. And many of those who appeared at the recent public comment session – backed by the Sierra club and the Climate and Environment Commission (CEC) – pushed for an even more aggressive standard of “100% renewables by 2030.” Again there was no discussion of the cost.

In order to meet this more aggressive target, we would be buying additional resources that we do not currently need to provide electric service to customers. As is laid out in the Siemens Integrated Resource Plan that was prepared for the task force, CWL is already overbuying resources to meet renewable goals. In fact, it is showing a “long position” through 2030. The additional costs of overbuying to meet renewable targets are not fully covered by the amounts received when the existing resources that are then displaced are resold. And if market rates at the time of sale do not meet planning projections — as happened in Texas when a municipal utility followed that same strategy – our costs to meet more aggressive renewable targets will be even greater than projected.

The Sierra Club of Texas has acknowledged that the move to incorporate more renewable energy into a municipal portfolio can be costly, and that affordability of electric service must be a key criterion in determining an appropriate plan. They also emphasized that any such plan must be the result of a robust and public engagement process. Both of these factors – affordability and sincere public engagement – have been missing in Columbia’s push to renewable energy. 

In 2004, voters in Columbia approved the existing renewable energy ordinance that set targets for acquiring renewable energy. These targets were specifically subject to a cost cap. That is, the cost of acquiring the renewable resources to meet the stated targets could not cause electric rates to increase more than 3% . The Task Force’s draft report that was provided for public comment reflected the CEC position that this cap could simply be removed by Council fiat and without putting the issue again to the voters. In approving its final set of recommendations, the Task Force correctly acknowledged the importance of maintaining affordable rates, and acknowledged the cap on increases. If there is to be a move to more aggressive renewable targets, the costs of that move should be fully disclosed, and the question of how to proceed should be again put to the voters.

03.08.20
by

Will You Be Able To Keep Your Electric Service?

Tad Johnsen, our Water and Light Director, is retiring after many years of working to ensure the reliability of our electric system.  His final report  to the Water and Light Advisory Board contained some concerning statements.

Referencing the Council’s recent focus on renewable energy, he stated:

In the future, electric utilities will need to make the transition from the provider of electric service to providing the different electric services consumers want.

This raises several questions, including the following: Who will bear the cost of these different “options”? How will this affect our service reliability? Who makes a decision to move from a full service menu that provides broad benefits throughout the community to an a la carte set of options desired by some but may be costly to all?  Who is deciding what “consumers” want? Will the community be allowed to vote before there is a change?

Unfortunately, we can’t count on the Council to decide what will best ensure safe and reliable electric service at reasonable rates.  Ever since the Council “paused” a proposed transmission line with no alternative plan in place,  it has avoided talking about that issue.  Over 60% of voters approved the proposed transmission line.  That line, had it been built, would have helped assure basic reliable electric service at a reasonable cost for many years to come. Instead, we have paid millions,  associated with the Council’s delay.  The Council does like to talk about “renewable energy”. However, as we have previously explained, “renewable energy” is not a substitute for adequate transmission despite the efforts of various Council members to suggest that it is, and it is not always cost effective. 

Mr. Johnsen also cautioned:

As we push towards increased levels of renewable energy in our resource mix, we need to understand the impacts to market risk and potential impacts to electric rates these changes may have.

We do need to understand these risks,  Unfortunately, the Council has been less than transparent about the ongoing costs of its actions.

Mr. Johnsen further stated that the current Integrated Electric Resources and Master Planning process will likely affect the structure of electric service rates.  He also pointed out that the planning for implementation of the Council’s recently adopted Climate Action and Adaptation Plan “could have an impact on how all of Columbia’s Utilities provide services in the future.”

He expressed the hope that

the impact of these changes will be evaluated from different perspectives, including short term and long term financial costs, environmental impacts, and quality of life effects.

We hope so too. Although given the Council’s past lack of transparency on this issue we can’t assume that will happen.  So if you care about safe and reliable electric service, the time to get involved is now.  One way to prepare is to take one of the classes that Osher is offering on understanding your electric service.  Taking this class can help you better understand, monitor, and weigh in on emerging issues.  You can register for one of two sections, one on Monday afternoons (March 9-April 6) and one on Tuesday evenings (April 14-May 5).

11.19.19
by

Transparency, Electric Service, And Focus

Municipal utilities exist to provide reliable service to city residents at affordable rates.     A Staff memo presented to the City Council on November 4, 2019 supported a 20-year contract at $4.5 million a year for a “utility scale” solar generation resource.  Part of the rationale was that this contract could help the City meet the greenhouse gas emission reduction targets in the climate change plan that the City Council recently decided to adopt.  The City would plan to resell most of the energy it obtains under the contract in the wholesale market to offset its cost.  Here is the specific language in the Staff memo:

Our current renewable rate impact methodology is an incremental cost impact model which works with the assumption that renewable generation provides needed capacity, does not exceed current load and can be absorbed by the existing dispatchable resources. When the level of renewable resources has the potential to operate outside of these assumptions, additional impact assessments should be considered.  It is important to know that at some point we would be producing more energy relative to our load, depending upon the reconciliation interval considered (i.e. hourly, daily or monthly). As renewable resources are added we will reach a point where the energy produced from our resources exceeds Columbia’s load.  This excess generated energy will be settled directly in the MISO energy market.

In other words, we will be buying more power than we need for providing electric service to users in Columbia. This appears to be a shift away from a focus on what is needed to provide electric service. The Water and Light Advisory Board is also considering how to advance climate change goals in the integrated resource plan for the electric utility by procuring renewable resources, and it is not clear that they are giving equal consideration to more traditional approaches.

The purchase of renewable resources to meet goals other than the provision of service can be very costly for those who pay the rates for utility service, as this cautionary story shows. Citizens deserve clear and easily accessible information on the options being considered. Only when all appropriate options, including purchased power and other traditional resources are evaluated for cost and reliability and risk can we properly weight the trade-offs and decide what best meets the need for efficient, reliable and cost-effective electric service. We are not getting this kind of information.

Ask questions and be vigilant. It’s your utility and you pay the costs.