Burnt Orange Report: - Austin

Leadership Costs Less

chris_searles — Thu, 19 Nov 2009 18:06:09 GMT

According to the analysis used to plan Austin's energy future it costs 3% more to lower Austin's CO2 footprint by 61 percent, as compared to the current plan which will lower CO2 18 percent, by 2020, below 2005 emissions levels. Expenses-wise that's an exceptionally small gap for an incredibly large gain, and likely that "3% more" is backwards. Let me explain.
Part 1:

Leadership Costs Less
I think it's fair to characterize shutting down Austin's coal plant and replacing it with local solar, energy efficiency, and West TX wind during the next 10 years, as a leadership plan. The world would certainly take note if Austin were to lead in climate protection, rate affordability, utility innovation, and local economic development. The current recommended plan (soon to be voted on by City Council) provides for keeping Austin's coal plant burning through 2020 at full bore; no shutdown. There are 4 reasons why leadership appears to be less costly than the current plan.

I. Paradigm Shift:
Clean Energy costs less than Fossil Energy (for Austinites)
I got energized by all of this when I learned the Texas Public Utility Commission had reported West TX wind electricity was suddenly costing less than coal electricity. (1) Wow. Coal is more expensive than wind, so sayeth the State of Texas. Things got richer when I learned that dollar per dollar, the most cost-effective investment for Austin Energy bill payers is energy efficiency (often called "demand reduction"). (2) This whole exploration got really inspiring when I began working with a team of successful businessmen, modeling the costs of local solar for Austin. It seems investing in solar panels for local, flat-roof, industrial rooftops is a superior financial strategy as its costs consist of 4 key areas: equipment (which can be paid for over 30 year loans), installation (which creates hundreds of local jobs), infrastructure, and near zero maintenance. The challenge with local solar is of course building the infrastructure to support running the new technology, more about that in my conclusion, but compare local solar's list of 4 costs to the 6 of utility-scale fossil fuel (esp. Austin's coal): equipment, pollution controls, ongoing fuel costs, ongoing operations costs, ongoing maintenance costs, and delivery costs. These costs aren't small on an annual basis, either.

Fossil fuels, esp. Austin's coal, carry high community costs, litigation risks, and legislative risks as well. AE's rate payers will not see "community costs" reflected in their bills, but we will see quality of life impacts in our future -- from the health injury and environmental degradation related to the fossil fuels industries. Meanwhile, litigation and legislation are very real future risks that could drive up annual costs of the coal plant by 10's of millions of dollars per year. (We've got the math to demonstrate this.) And -- to reemphasize, fossil fuel technologies are dependent on purchasing fuel from a volatile marketplace. Conversely, wind, solar, and efficiency require zero fuel purchases for life.

From a financial perspective local solar has significantly lower annual costs when compared to fossil fuel investments because its big ticket expenses can be spread out as capital costs over decades (like a mortgage) and local solar likely carries virtually no other costs, once installed. (3) Can't say that for Austin's coal plant. Our coal plant is on the hook for a laundry list of annual expenses and cost risks, not the least of which looks to be future big ticket improvements required to meet federal health and environmental standards. Maybe its time to get rid of the coal plant?

II. Austin Energy's Info shows.... Clean Leadership's Costs Are Lower

The document being used by Austin Energy's three energy plan advisory boards (4) clearly shows total "levelized" annual cost of the clean, leadership strategy to be $57.96 Million vs. $58.15 Million of the current recommended plan. (5) From a financial perspective, this indicates the leadership plan costs less... Read in total, AE's summay financial documents don't appear to make sense: A lower levelized annual cost but a 3% total cost of generation increase by 2020? A lower levelized annual cost but more 80% capital costs? ... These financial contradictions need to be considered more carefully before voting on the plan.

III. Clean tech has fewer annual costs, those costs are easier to finance over long term loans
Clean tech investments are "capital costs" centric -- and that's a good thing (see above, "Paradigm Shift"). Clean Leadership also eliminates health and environmental injury costs to the community (see below, "Community Costs").

IV. Community Costs -- Health & Environmental Injury $$
There's not yet an accepted metric for valuing how much the environmental devastation related to fossil-fueled electricity costs ... but there is one that quantifies local health costs.

The National Research Council was recently commissioned by Congress to create a report detailing the annual cost of health injury impacts to Americans from tailpipes and power plants. This economic study shows that coal plants in the US cause $62 Billion annually in health injury costs, primarily attributed to the costs of early death. (6) The report identifies Austin's coal plant as having a total health injury impact of $200 to $300 Million in the year 2005. That cost is about to go down significantly as Austin Energy is paying $225 million to install highly effective SOx pollution scrubbers on its coal plant. Yes, the improvements will make the plant less injurious -- but they won't eliminate all health impacts, mostly notably ozone, mercury, and particulate pollutions. Austin owns 1/3 of a coal plant it shares with the LCRA, thus we are essentially responsible for 1/3rd of that plant's total health impacts in the future. Our team estimates Austin's coal plant, conservatively, will cost area residents about $36 million per year (out of a total $118M per year) in health injury. Not to mention the these "costs" reflect early death, lifelong lung injury (asthma, etc), and other the effects of airborne mercury pollution. (7, 8)

We Need Vision
Paradigm shift. Change. Revolution. These things can be scary. But with committed leadership, Americans have a pretty good track record -- we "won the war," went to the moon, built the Golden Gate Bridge, built the Hoover Dam, built our beautiful Capital of Texas building, started a couple of small businesses named Whole Foods (1981) and Google (1999), and created one of the best electric utilities on earth: Austin Energy... Amazing things are possible, and in the case of Austin's role in climate protection, amazing things are apparently more affordable.

If you believe bold action on the climate crisis is a human imperative, if you believe the data that shows our permafrost is disappearing, our oceans are losing their ability to retain CO2, our Arctic lakes are emitting methane (a more potent greenhouse gas than CO2) instead of freezing in the winter, our aboreal forests are drying out and releasing more CO2 than they're capturing, or that losing 3/5 of the world's forests in the last 150 years to economic development might be a problem, or that -- the world's oceans are cooking our corral reefs and they'll be extinct by the time most of my friends' kids graduate from high school, or that American farmers will lose 30 to 63% of total grain yields by the end of this century if we don't "fight" climate change -- then you might agree it's probably better to take bold action immediately and eliminate pollution rather than gamble on exacerbating any of these factors and heading towards a near-term era of "total biological devastation" -- which some very credible scientists say is less than 90 years away if we don't stop polluting. If you believe any of the thousands of implications being shown by recent changes in our eco-sphere -- then you know we have no choice but to do everything we can to become the leaders the world needs.

Next week, Part 2: Holes in our Status Quo Plan

SideBar
I reckon we need about 200 committed, intelligent people to talk to our leaders and make real change happen here in Austin. If you've read this far, you're one of those people. Please check out our citizen petition urging Austin City Council to recommit to climate leadership: http://tinyurl.com/austinclima... and our Facebook group, to learn more about what's going on to bring forth a clean, affordable solution to Austin's coal plant: http://tinyurl.com/austindirty...

Contact me via the Austin Eco Network with any questions.

Next Week's "Holes in the Status Quo Plan," will incl:
1. We've got a compliance plan -- not a leadership plan
2. Ignores Legislative Risks -- up to $34M annually
3. Ignores Local Job Impacts
4. Clean Costs Less (review)
5. Language of Austin's Climate Protection Plan

Thanks for reading, Chris Searles

Notes
> 1. Wind Costs Less Than Coal
Public Utility Commission of Texas, http://www.puc.state.tx.us/ "Scope of Competition in Electric Markets, January 2009" states -- "Wind has had the effect of reducing electricity prices across the state" (paraphrased from pg. 65 of that report). Contact me via the AustinEcoNetwork for a copy of the extracts from that report. Quick vid:

> 2. Energy Efficiency is our lowest cost energy producer
This concept stems from the idea that efficiency improvements require one time capital and installation costs to deliver continuous, or recurring, kilowatt reductions. Austin Energy's leaders call this "the virtual power plant." With Energy Efficiency, there are no ongoing fuel costs, operations costs, maintenance costs, transmission costs, regulatory costs, regulatory risks, etc. to pay. In short: purchase the equipment --> install it --> done. There are of course many variables to performance of efficiency improvements, incl such things as needing to replace a light bulb every 5 years, or needing to repaint a white roof every 9 years, or needing to replace attic insulation every 50 years. But the overall effect in any efficiency improvement is long term kilowatt reduction, without any additional $$ inputs, for years and years.
> 3. Clean Capital Costs are Good
One thing that's been fascinating about the discussion thus far is the fear of "capital costs" around local solar... In fact, investing in new equipment appears to be less expensive in total costs than investing in maintaining the old equipment -- just financially speaking. When one considers the "risk insurance" going with new clean tech in the Obama era provides, clean tech becomes an imperative. The Obama Admin is committed to clean air and carbon legislation. That's a 100% paradigm shift from the Bush years. Maybe its time to let go of the old coal plant, folks.
> 4. Austin Energy's advisory boards
Austin Energy's three energy generation plan advisory boards are the Generation Task Force, the Electric Utility Commission, and the Resource Management Commission.
> 5. "Levelized Annual Costs"
"Levelized Annual Costs" cited by me here are a reference to the Pace consultancy's "total levelized net present value" costs shown in 'Exhibit D' from Philip Schmandt & Chris Herbert's excellent paper, "Report from the Chairs of the Electric Utility Commission and Resource Management Commission Regarding the Austin Generation Resource Planning Task Force," Nov. 10, 2009. This document is also where I draw the 3% more for total generation costs, and the idea that Exhibit D appears to contain numerous financial contradictions. Contact me via AustinEcoNetwork to obtain a free copy.
> 6. National Research Council report, Fall 2009, "Hidden Costs of Energy"
Contact me via the AustinEcoNetwork to obtain a free digital copy of this report.
> 7. Health Injury Costs = Future Capital Costs
Consider this, from a financial perspective -- as long as there are health injury impacts there will be, at some future point, pollution mitigation costs, whether on new equipment or improving old equipment. Additionally, I believe that as more people learn about what Austin's coal plant is doing to their lungs, their bodies, and the lungs of their children, Austin's coal plant becomes a litigation target. As an asset, I see the future of the coal plant becoming more and more and more expensive... a clunker?... Maybe its time to get out of the coal plant, folks.
> 8. Price of Environmental Degradation
A comment on the value of $$ environmental degradation: Even if we assume Austin's coal plant, whose operations currently engage in strip mining, slurry pollution, habitat destruction, long range transportation, and coal ash disposal, and create tons of greenhouse gas pollution, ozone-forming NOx pollution, mercury pollution, heavy metals pollution, acidic pollution, and more... -- even if we assume the environmental injury related to this modus operandi is only worth $1 per Austinite, per year, that's around $750,000 of additional community costs that should be shown on Austin Energy's balance sheet. AE leaves environmental injury out of its current plan's considerations. Leaving it out says they value environmental degradation at $0. We can do better.

Former Austin Mayor Travis LaRue Passes Away

Karl-Thomas Musselman — Wed, 18 Nov 2009 01:00:00 GMT

At the age of 96, former Austin Mayor Travis LaRue passed away over the weekend, becoming the second former mayor (after Roy Butler) of the Capital City to die in the last week.

As a historical aside, LaRue was the last non-elected Mayor of Austin, having served from 1969-1971 after being chosen by the City Council. In 1971, Austin held it's first direct election for mayor after moving to a council-manager form of government. And in a somewhat odd co-incidence, LaRue as a sitting Mayor was defeated handily in 1971 by none other than Roy Butler, who also passed away this past week.

Date of Election: April 3, 1971
Registered Voters: 93,597
Total Ballots Cast: 53,140
Percent Turnout: 56.78%

Mayor
Butler, Roy 34,099 65.29%
LaRue, Travis L. 7,871 15.07%
Montgomery, Jon 7,323 14.02%
Stopher, H. W. (Oat) 787 1.51%
Donley, Raymond (Jr.) 565 1.08%
Cole, Lorado 508 0.97%
Tune, Ray 462 0.88%
Damon, Jim 376 0.72%
Hickerson, Carl 232 0.44%

In a further electoral note, Lowell Lebermann, who passed away in July, won election that year, defeating 3 opponents including Royal Masset.

University Democrats Hosting BLUEPrint for Texas Fundraiser Wednesday

Karl-Thomas Musselman — Tue, 17 Nov 2009 21:28:20 GMT

I don't often like to post about organizational events or fundraisers, especially if they are specific to just one city in the state, but we wouldn't be the Burnt Orange Report without the University Democrats at UT-Austin.

The University Democrats, established in 1953, is the largest and oldest political organization at The University of Texas at Austin and the leading force of progressive student activism in the state of Texas. Today, they are the largest College Democrats chapter in the country - working to bring democratic ideals to UT, the state of Texas, and the entire nation.

Last year they broke records by registering 12,000+ young voters across the state and mobilizing an entire generation of young Texas activists to blockwalk, phonebank, and elect strong Democrats to the County Court House, the State House, and the White House. After the elections, they continued to be at the forefront of the youth movement in Texas by organizing students to be the voice on important legislative issues like tuition relief, gun-free schools, tax-free textbooks, and the disenfranchising voter ID bill.

This year they have pledged to be at the forefront of the movement to turn Texas blue. University Democrats has built a large and committed team of extraordinary student activists who are ready to organize young people to bring change to our state. With a plan, BLUEPrint for Texas, the mission is to turn Texas blue from the ground up by mobilizing student activists to:

• TRAVEL to swing districts across Texas to work for candidates.

• DISTRIBUTE voter registration cards in key neighborhoods.

• REGISTER new voters.

• KNOCK on doors for key candidates.

• CALL households on behalf of Texas Democrats.

• MOBILIZE young people to vote early.

In order to be effective in mobilizing students for change in Texas, Unversity Democrats needs the resources and support from community leaders like you! Please support them by making a donation at their fundraiser this Wednesday. I know I'll be writing them a check.

University Democrats: BLUEPrint for Texas
8:00 p.m. Wednesday, November 18th, 2009
UT-Austin Business School Special Events Room (CBA 3.304)
($40 minimum donation to attend please)
$50= ground breaker
$100=contractor
$250=developer
$500=master developer
$1000=architect
$2000=master architect

Using Fear To Distract and Divide

Lainey Melnick — Mon, 16 Nov 2009 22:31:48 GMT

Today we are faced with another fear-based debate about whether or not the Guananomo Bay Detainees should be housed in US prisons and be given their days in court. If you were to believe the rhetoric from the Republican partisans, America has never faced such danger from any other past enemy or based decisions during wartime on human rights, the Constitution and international law. The reality is, of course, that we have been faced with all these things before and our values cannot be compromised especially in challenging times. The Supreme Court decisions upholding habeas corpus rights for these detainees is evidence that we, as a people, have a firm belief in the Constitution and our role as model for international law and human rights.
US Cities are not afraid of housing these detainees. They are now fighting for the priveledge of being home to state of the art new prison facilities, economic growth, and job stability that could re-invigorate these American communities. According to the U.S. Bureau of Prisons, federal facilities on American soil currently house 216 international terrorists and 139 domestic terrorists. Some have been imprisoned here since the 1990s, and none of them have escaped.

The partisans, with Rep. Lamar Smith as their leader, are building fear about our judges just releasing these prisoners out into the United States. If there is not evidence to convict these detainees of a crime or once their sentence has been carried out, I support releasing them back into the custody of the Secretary of Homeland Security for transfer to the individual's country of citizenship. Being imprisoned in the United States doesn't grant citizenship or other rights of citizenship to the prisoners. The argument that we are rewarding these detainees with more rights and possible release into our communities is nothing more than a distraction meant to divide our country.

--
Lainey Melnick
Candidate for US Congress
Texas 21st District
http://www.LaineyForCongress.com
lmelnick@laineyforcongress.com
On Facebook, http://www.facebook.com/pages/...
On Twitter http://www.twitter.com/lmelnick
Paid for and authorized by the Lainey Melnick for Congress Committee

Austin City Council -- Recommit to Climate Protection

chris_searles — Tue, 10 Nov 2009 14:20:52 GMT

(Co-sponsored by Jake Stewart, frmr manager of Austin's Climate Protection Program.)

Some friends recently suggested we petition Austin's new City Council to recommit to Mayor Wynn's 2007 Climate Protection Mandate. I think this is a great way to urge our leaders AND show them our support.BOR readers know I've been involved in (and somewhat critical of) Austin Energy's Recommended Generation Plan, 2010 to 2020. I'm one of thousands concerned about the plan's alarming financial oversights, costly health impacts and lack of initiative on climate and environmental issues. But I also think it's important to let our elected officials know that I (we) will support them if they come through with some strong climate actions.

Here is the text of our petition. I hope you'll consider signing it at http://budurl.com/AustinCPP

The City of Austin makes the goal of its Climate Protection Plan clear: to "make Austin the leading city in the nation in the fight against climate change." We have created the petition below to show our support for the Mayor, City Council, Austin Energy, Austin's city leaders, and our diverse community of multiple stakeholders, to achieve rapid implementation of affordable, world-leading, climate solutions, immediately.
We, the citizens of Austin, TX, urge members of Austin City Council to officially recommit to our City's Climate Protection Program. We feel our City can and must do more, and we stand ready to support our City's commitment to world-changing leadership.
In 2007, just two years ago, when the Austin Climate Program was adopted, more than half of today's council was not yet elected, we had a different Mayor and a different City Manager. We urge our City's new leadership team to recommit the City to the bold, urgent and important goals laid out in 2007.
We ask that today's City leadership put climate solutions first on their agenda and make public their commitment to finding an affordable way forward.

Austin needs to be a leader on the environment and clean energy. We pledged to do just that. Now it is time for us to move forward and fulfill our promises.

Affordable Health Care for America Act Passes House

Lainey Melnick — Sun, 08 Nov 2009 04:33:05 GMT

Tonight we witnessed a landmark vote for our generation, 220-215. Never again will people be turned down from health insurance due to pre-existing conditions. Never again will Americans go bankrupt due to health care crisis. Never again will our health care be based on our continued employment. Never again will we stand by and watch our neighbors die from lack of access to affordable health care.

This was an historic day that we've worked towards for decades, and now we are one step closer to achieving total victory. We now wait for the Senate version and then the process to combine them into the final law.
Watching the debate all day on the house floor made me all the more committed to my fight against injustice. Watching heroes like Rep. Dingall who presided over the Medicare debates in 1965 and is still fighting today is my inspiration. I watched Rep. Doggett represent Austin with pride and passion. These are my role models. The leaders who are fighting for the people, not the special interests.

Then I saw my opponent, Rep. Lamar Smith. He claimed that he cares about providing health care to those in need, and yet he has voted twice against children's health insurance for low income children, and No to real health care reform tonight. The Republican alternative ignored the need to end discrimination against pre-existing conditions, and instead opened more loopholes for the private insurers to further abuse. It is clear that the Republicans in Congress, being led by ranking members such as Lamar Smith don't want solutions. They want failure for our President and our country.

It is time for a change.

--
--
Lainey Melnick
Candidate for US Congress
Texas 21st District
http://www.LaineyForCongress.com
lmelnick@laineyforcongress.com
On Facebook, http://www.facebook.com/pages/...
On Twitter http://www.twitter.com/lmelnick
Paid for and authorized by the Lainey Melnick for Congress Committee

A Referendum on Incumbents

Lainey Melnick — Wed, 04 Nov 2009 19:28:56 GMT

Last night's election results were less a referendum on the Democratic Party, and more a referendum on incumbents and limitless campaign spending. Exit polls showed that the number one concern of voters was the economy and jobs, and the voters themselves said that their vote was not about the performance of the President. The candidates pouring money into their own campaigns, spending millions of dollars to win, only reminded the voters of the vast gap between the rich and poor in America. In several races, those spending the most, did not win. Here in Texas, in the race for Houston Mayor, Annise Parker came in first after being outspent 5:1 by her challenger. While the latest poll averages from realclearpolitics.com show that the President's approval is still high at 51.4%, the approval of Congress is only at 24.8%, and of those polled only 38.8% think that America is on the right track. At this time of economic hardship, high unemployment, and job insecurity, the voters across the country voted out incumbents, those seen as contributing to our economic conditions, and voted for change.

These election results offer hope and inspiration to those of us challenging long-time sitting Republican incumbents with their own large war chests, such as Lamar Smith. Americans are ready for a change, ready for Representatives who will take action and represent their interests, not the special interests. It is time for Representatives to find solutions to our most critical issues, create and grow jobs, and put our country back on the right track. That is precisely what I will do when I am elected in 2010.

If you feel that your voice isn't being heard, if you are tired of the failed policies of Lamar Smith, and if you have a vision for a better tomorrow, then please join me in taking action to win in 2010. Go to my website, http://www.laineyforcongress.com, and contribute to my campaign, join our team, add your endorsement and spread the word that we have a winnable race in Texas Congressional District 21.

Austin's Energy Plan -- Ignores Huge Financial Risks

chris_searles — Wed, 04 Nov 2009 14:56:51 GMT

The risk analysis used to create Austin Energy's Staff Generation Plan omits numerous elements that will cause Austin's near-future electricity prices to spiral upward.

Alarming Financial Risks associated with: ozone nonattainment, greenhouse gas regulation, coal ash regulation, health injury costs, exposure to litigation, and highly volatile maintenance costs -- are all left out of the analysis used to guide our City's energy plan, 2010 to 2020. Thus, City managers are recommending a coal-centric strategy. Risks omitted all target Austin's coal plant, located in La Grange and responsible for providing 1/3 of your electricity...

Pace consulting was hired by Austin Energy to create financial analysis of various scenarios related to planning Austin Energy's next 10 years. Pace's risk analysis document clearly shows a clean energy strategy costs Austin less, but would be financially riskier for Austin bill payers than the Austin Energy's Staff Recommended Plan. (1) Yet Pace's risk analysis omits numerous elements that will cause Austin's Staff Recommended Plan to spiral upward in costs as they come online.

Here's a list of what the Pace risk analysis chooses not to consider:

1. Ozone
Penalties for "Ozone non-attainment" will affect not only Austin Energy (AE) but all of Austin's economy. Austin is currently hovering within "1 or 2 parts per billion of non-attainment." According to County Commissioner Karen Hubner, penalties relating to nonattainment will potentially affect Austin for more than 20 years. (2, 3) Word on the street is that the Obama Admin is preparing to toughen standards and enforcement on ozone. This risk is neither acknowledged nor accounted for in any of the Pace reports. Key questions: How much will this legislation costs AE and when might they take effect? What's a good estimate? Why aren't ozone's costs to Austin's economy included?

2. Greenhouse Gases
The EPA is moving to regulate Greenhouse Gases, independent of Congress. This risk is neither acknowledged nor accounted for in any of the Pace reports, including its Risk Analysis. Key questions: How much will this legislation costs AE and when might they take effect? What's a good estimate? Why aren't greenhouse gas risks included in the analysis?

3. Coal Ash
The EPA is moving to regulate Coal Ash. This is a huge area with negative health effects both upstream and downstream in the coal industry. There are numerous points in the chain where coal ash could be regulated, and there are numerous types of coal ash. This risk is neither acknowledged nor accounted for in any of the Pace reports, including its Risk Analysis. Key questions: How much will this legislation costs AE and when might it take effect? What's a good estimate? Why aren't coal ash risks included in the analysis?

4. Health Injury
The National Research Council recently reported that every coal plant in America causes $156M in health damages every year. (4) This cost to the community is neither acknowledged nor accounted for in any of the Pace reports, including its Risk Analysis. What are the costs to Austin's citizens and economy that should associated with our coal plant's ozone pollution, particulate pollution, and mercury pollution? What are the costs to Austin and area citizens that should be associated with 1,030 new asthma cases each year, directly attributable to our coal plant? (5) What are the costs to Austin and area citizens that should be associated with new death each year, directly attributable to our coal plant? How much will improving the plant so that it no longer causes these health injuries cost Austin bill payers? Why aren't public health concerns included in the analysis?

5. Litigation
According to the Sierra Club, Austin's coal plant will soon move from #7th worst polluting industrial complex in TX to #50th, out of over 2,000 surveyed by the Texas Commission on Environmental Quality. According to studies by Harvard and the National Resources Defense Council, Austin's coal plant causes 44 deaths per year. Law suits against Austin Energy or the plant itself related to the plant's mercury pollution, heavy metals pollution, particulate air pollution, or any of the plant's other direct negative health impacts are neither acknowledged nor accounted for in the any of the Pace reports, including its Risk Analysis.

6. O&M Volatility
What range of expenses can Austinites expect from continuing to keep our 30 year old coal plant running 10 more years? New boilers? Annual maintenance? 10 year maintenance? The Pace documents don't show their math, so it's impossible to know whether the analysis considered Fayette's age and repair. These risks are neither acknowledged nor accounted for in any of the Pace reports, including its Risk Analysis. Given the likelihood that running an old coal plant is only going to get more expensive, when should AE decide to abandon its "problem asset" coal plant? What is the range of likely costs associated with this particular plant? What is the range of likely costs associated with a plant this age and condition?

7. Details
Slide 5 of the Pace Risk Analysis, "Market Risks," is so vague, so general, it's disturbing from a financial perspective. Example: #4 Risk (of 6 listed): "Capital Cost Uncertainty: Materials costs and capital costs have been volatile in recent years, Technology uncertainty results in wide range of potential outcomes." Whoop. ti. do... Where's the rigor? They've acknowledged the risk, but it's certainly not accounted for in any clear terms. In other words, there is no range of "potential outcomes" shown anywhere in any of the documents. We have no idea what the range of risk is, associated with Austin's coal plant, or any of its energy properties. None of the Pace documents show their math, thus we have no idea what their assumptions are -- esp. in financial terms. My high school-aged nephew would be graded harshly for such generalizations.

Summing Up
To me, the overall lack of attention to detail and the omission of specific risk areas in the Risk Analysis implies that Austin Energy is looking backward when thinking about Austin energy future. From a financial perspective, it's irresponsible at best. We've got to keep hospitals running, food cold, and people employed, affordably. We've got to solve the climate, environmental, and health crises associated with our 20th century energy model. And yet -- we have a 100% subjective representation of Austin's future electricity costs as our sole forecasting tool.

This post is about financial risk. Current plans are to keep Austin's riskiest energy investment (its coal plant) burning 10 more years. Environmentally, this is a disaster. The National Research Council estimates the plant will do more than $1B in area health injury over the next 10 years. Financially, the near-term pains will be felt by all as today's unacknowledged and unaccounted-for legislative risks become realities.

######

Notes
1. slide 17, "Pace_Analsysis_Risk" (PDF), available at AustinSmartEnergy.com
2. Jim Marston, board chair of the Clean Air Force of Central Texas, Austin Chronicle, August 18, 2009 - http://www.austinchronicle.com...
3. Karen Huber, Precinct Three Report, August 14, 2009 - http://www.precinct3report.com...
4. "Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use," National Research Council, pg. 67 -- http://www.nap.edu/catalog/127...
5. National Resources Defense Council "Clean Air Task Force"

learn about Austin's clean, affordable, alternative strategy: http://www.burntorangereport.c...

Benefits of the "Quit Coal by 2014 scenario" --- #5. Lower Health Costs

chris_searles — Fri, 30 Oct 2009 14:37:42 GMT

Austin's coal plant causes $200 to $300 million in health damages -- every year, according to the U.S. National Research Council.
Austin's coal plant causes $200 to $300 million in health damages -- every year. (1) That's according to a recent report commissioned by U.S. Congress, completed by 20 leading economists at the U.S. National Research Council.

Background
The National Research Council (NRC) is a U.S. Congress chartered non-profit. Their report, "Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use" was released earlier this month in pre-publication form for public consumption. (2) The NRC is under the umbrella of the National Academies. From their press release,

"The report assesses what economists call external effects caused by various energy sources over their entire life cycle. Because these effects are not reflected in energy prices, government, businesses and consumers may not realize the full impact of their choices. When such market failures occur, a case can be made for government interventions -- such as regulations, taxes or tradable permits -- to address these external costs."

How This Relates to Austin
Austin Energy's Staff Recommendation for Energy Planning, 2010 to 2020, in no way takes this metric, these costs, or these effects into account. (3) Austin Energy's current plan assumes no financial responsibility for the negative effects burning coal 2010 to 2020 will have on our economy and our health. This economic rabbit hole, according to the National Research Council, will cost Austin area residents somewhere in the range of $1.5B to $3B during the next 10 years. Generally speaking, area poor will be the most severely impacted.

In bill payer terms, these costs reflect an average increase of well over $0.03 per kilowatt hour (that's an NRC calculation), making the annual cost of Austin's coal nearly twice that of West Texas wind. Furthermore, if Austin were to replace its coal plant with a flat, industrial, solar rooftops program, as suggested by Mike Sloan and the "Quit Coal by 2014" scenario -- annual capital costs on 30 year financing to purchase and install said clean electricity would be less than Austin's annual coal fuel expenditures, 2010 to 2020, as projected in the current electricity plan; operations and maintenance would be presumably lower as well; fuel costs, health care impacts, and exposure to federal regulation risks would be ... zero. (4) I'm not making an attack here. The City's assignment to Austin Energy was to create a plan, which specified "no plant closures before 2020." But, think about it! It costs Austin less to go clean than to stay dirty -- and it's less risky, and it invests in the local economy, and it creates less volatile electricity pricing and better health... Shouldn't Austin seize these opportunities now? Why wait? With the Quit Coal scenario -- Everybody wins: big employers, low income customers, health care advocates, faith and social justice advocates, politicians, enviros like me, and our very dedicated utility stewards. Maybe our new City Council should re-write Austin Energy's assignment?

Austin's Coal Plant is located in La Grange, TX - just two counties east of Travis (in Fayette county). We are "downwind" of the plant's total emissions. Austin's coal plant is often called "Fayette Power Plant" (FPP), it provides 1/3rd of Austin's total electricity, we run 1/3rd of this plant's total capacity. Austin co-owns its coal plant with the LCRA. (5)

When to say When
Downward spiral? Cleaning up Austin's coal plant costs big $$. Perhaps we should be asking when to get out of this investment? The Obama Admin is bearing down on dirty coal in four areas: ozone, CO2, greenhouse gasses, and coal ash with costly regulations in the works. Reports like the one from the NRC suggest there will be more to come.

Austin's coal is only going to get more expensive.

Austin Energy recently committed $230M+ of your money to installing "new scrubbers," which will bring the plant into compliance with current clean air standards, not future ones. Dr. Neil Carman, Clean Air Program Director for Texas's chapter of the Sierra Club, tells me this ambitious scrubber install will move our coal plant from #7th worst polluter in the state to approximately #50th by 2012 out of 2,045 industrial complexes surveyed. (6)

For more on this see my series at the Burnt Orange Report:
http://www.burntorangereport.c...

Notes
> 1. Image taken from "Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use," National Research Council, pg. 67 -- http://www.nap.edu/catalog/127... (Downloading this chapter of the report costs $4, whole report $43, contact me for a free copy.)
> 2. National Research Council -- http://sites.nationalacademies...
> 3. Austin Energy's Staff Recommendation -- http://austinsmartenergy.com/ (look in left margin, "Recommendation & CO2 Plan" to download). Currently the city's planning analysis omits numerous community impact costs, as well as numerous financial risks related to continuing to run Austin's coal plant. More on that to come...
> 4. Powersmack.org, "Coal Fuel Costs are Rising" shows Austin's annual coal expenditures over 1999 to 2008 (10 years) to average out at $46/$47M per year -- http://powersmack.org/coal-fue... Note that the Pace analysis Austin Energy is using to guide its planning forecasts coal fuel prices for Austin, 2010 to 2020, to be about $61M per year. ... More: ... A local solar install project costing $750M might deliver 750 Megawatts of 'variable' energy. Combined of course with more energy efficiency (demand reduction, those rooftops would help replace our coal plant's 600MW of 'reliable' energy, now. Note -- if the solar install portion of this project were financed according to each annual install, let's say 150 MW of installation per year for 5 consecutive years, with interest rates @ 7% (a VERY high rate in today's market, btw), the annual debt service would average aprox $44M per year, $16M lower than Austin's annual coal fuel expenditures as projected in the current electricity plan. Please also note that some of the solar install's capital costs might be further reduced by Obama-era clean energy incentives. Contact me if you'd like to "see my math."
> 5. Austin's portion of this 10 square mile complex is also referred to as "Sam K. Seymour Generating Station." Read more via the LCRA's website -- http://www.lcra.org/energy/pow...
> 6. Note that the LCRA likes to promote this improvement as helping the plant to achieve a "high environmental standard." Survey by the Texas Commission on Environmental Quality.

Capital Metro Should Exempt Seniors and Disabled Citizens from Fare Increase

Margaret Gomez — Wed, 28 Oct 2009 20:29:12 GMT

Being chosen by my peers to chair the the Capital Metro Board has been an honor and a privilege. It has also been one of the toughest volunteer jobs I have ever had. We have dealt with accounting errors, a union strike and continuing delays in the opening of Metro Rail. However, despite problems with agency's leadership, I never lost sight of my responsibility as chair of the board: to help Capital Metro provide an efficient and affordable system of public transportation that the people of Travis County can depend on and take pride in.

As chair, I have had to make many tough votes. I stand by my vote against using one-time stimulus money to delay an inevitable fare increase. As an avid supporter of rail, I believe the money is better spent investing in long-term improvements to our rail lines.

As difficult as it is, a fare increase is needed to continue providing current level of service to the transit dependent. I am proud to say that Cap Metro's fares will remain among the most affordable in the nation.

I have expressed to leadership that I believe Capital Metro would benefit from an aggressive nationwide search for a new CEO with executive leadership experience. We need someone who can run an agency successful, rather than someone who only has experience in transportation.

Approving a fare increase is never a popular decision, but I believe it is the only way Capital Metro can survive at this time. However, I do not believe that we should balance the agency’s budget on the backs of elderly and disabled citizens, which is why I will ask the board to exempt seniors and disabled citizens from any fare increase.

Capital Metro has made mistakes, but this should not be one of them. There is no good reason not to exempt seniors and disabled citizens from a fare increase. My constituents in Precinct 4 and people from across the county understand this, too. Government should be there to help those who need it most, not increase their burden. In tough economic times, little things add up. For my constituents who receive Social Security and disability benefits, this is even more true.

There is a lot of work ahead at Capital Metro. To start, they should launch an aggressive nationwide search to insure we find the most qualified individual. Most importantly to the many people who rely on Capital Metro everyday, they can agree to exempt seniors and disabled citizens from a fare increase.

I look forward to hearing back from you all on this issue. Please leave your comments below or connect with me on Facebook, Twitter or on my website.