Month: December 2015

I know some folks are interested in the meeting from this week. I’ll put together something more coherent after thinking and talking with more people, but for now here are my rough notes – comments, queries, and corrections welcome:

Meeting Dec. 28 at City Hall, council work chambers, attendance: Jennifer Lane, Ed Soph, Carol Soph, Theron Palmer, Elida Tamez, Adam Briggle, Ken Banks (COD sustainability), Jim Maynard (DME), Katherine Barnett (COD sustainability), Phil Williams (DME).

Initial discussion focused on GHG implications of the plan with the aid of a new excel spreadsheet that can be made public. Data on the sheet come from either EPA EGRID (city has used this database since 2006) or from specs of the proposed RICE plants (guaranteed maximum emissions – it will likely perform better). I think sometimes data come from measurements at individual power plants.

The spreadsheet showed overall GHG emissions are reduced by 74% with the plan vs. status quo.

There is still an emissions reduction (I think they said 48%) even if we account for the additional generation for sale on the ERCOT market, which is a form of double-counting emissions.

ERCOT market sales from the proposed RICE plants will not displace solar or wind, because they have zero fuel cost and the stack is set by fuel cost (lowest comes online first).

The ERCOT market sales from the proposed RICE plants will displace some coal but mostly natural gas from less-efficient and more –polluting sources, mostly to the south and east of us.

There was another spreadsheet from the same data sources that showed how the proposed plan would reduce our overall consumption of natural gas by 37%. This spreadsheet too can be made public.

Other utilities are building plants like these, including some in south Texas and golden spread in the panhandle, which has 170 MW from these plants and has just switched into the ERCOT market to track with wind similar to the proposed plan by DME.

The conversation the focused more on the local air quality impacts of the proposed plan. There was some indication that outside consultants were used for help with air permitting – I didn’t get the name of the company, the woman mentioned was something like Mary Hauner-Davis(?). A claim was made that the proposed RICE plants are equivalent to 1% of on-road emissions in Denton County.

Denton has poor air quality in large part due to emissions from south and southeast – power plants, cement plants, and on-road sources.

When we purchase electricity from the market, it mostly comes from the south and southeast – the places that impact our air quality. So, producing that electricity here will displace emissions that would have otherwise come downwind of us. NOx impacts will be minimal in part because it will dissipate and move north before forming ozone. And also in large part because these proposed RICE plants are roughly 9x more efficient (emit 9x less NOx than the market average gas plant) – this claim came from another data source that I will also see if we can get publicized. Electricity generation in DFW ten county area emits 5,482 tons of NOx. The proposed RICE plants would emit 40 tons. Electricity generated by them for Denton will displace the coal plant and electricity generated by them for ERCOT market sales will displace these dirtier gas sources.

They have consulted Dr. John at UNT – he didn’t think there would be a noticeable change at Denton monitor, but there would be additional ozone precusors heading to the north.

TCEQ treats this as a minor (non-major) source.

At any point a new business/industry could move to Denton and produce this amount of emissions with a standard application through TCEQ. It would not require a public dialogue or vote and would not come with the increased renewables. And Denton cannot effectively regulate this as it is preempted on air quality issues.

Why not more solar now? If we go all in on solar now, we are too soon – the technology is developing rapidly so we want to wait a bit to get better technology over the coming years – we want to add new solar and/or batteries to accommodate Denton’s growing demand over the next 40 years. The idea is that all new demand is met with renewables and that we increase our overall percentage of renewables up to 100% by 2030.

Georgetown has 100% but that means in the sense that they buy enough electricity to cover their megawatts, but it doesn’t all come at the right time so they buy back up that is natural gas, dirtier than the proposed RICE plants, more expensive, and not under their control.

The ideal is to go 100% with batteries charged by all renewables. Forecasts they have heard and read show us being at least twenty years away from that and likely longer. Elon Musk has a stated goal to displace 10% of electric generation in 20 years.

DME rates have averaged 10% to 15% below market rates over past 15 years – DME is an at-cost provider – this was from a website called something like power achieve??

There was a good deal of discussion both about Green Sense and reducing demand/ working on conservation efforts. General acknowledgement that that too is important, especially for the key accounts (top 127 meters account for 40% of total electricity usage). But a sense also that getting to 100% via Green Sense is going to take a very long time. A claim was made that if all 45,000 customers residential got solar it would cost $720 million and would still require the gas plants as back up.

On Gibbons Creek still operating – it is like trading in your older, dirtier car for a more fuel-efficient one. Just because someone still drives your old car, does not mean you are responsible for those emissions. And in this case, we will be driving dirtier megawatts from other plants off the market, meaning very real emissions reductions.

A claim was made that 70% is the minimum renewable level sought by 2019 with the plan and that it would maybe be closer to 80%.

Due to interest rate increases (I think) deliberation about the plan has already increased its price by $10 million.

DME requires some confidentiality or else it will always be at a competitive disadvantage.

If 5,000 MWh of coal-fired electricity was shut down east and south of us at 130,000 tons of NOx that would only move the needle on our local ozone down by 1 ppb – this from Dr. John.

Some things I think we forgot to ask or could have done better on: notification for residents near the sites for the proposed RICE plants, the possibility of community aggregation, emphasizing more data for health impacts or air dispersion models.

Last week, Devin Taylor and I met with six of the top managers and supervisors at Denton Municipal Electric. It was incredibly gracious of them to give us two hours of their time in the evening when they could have been home with their families.

They knew about our op-ed, in which we expressed doubts about their proposed Renewable Denton plan. They came very prepared to field our questions. I will do my best to share some of the things we discussed here. If Devin or members of DME find errors here, I will incorporate them with updates.

To be candid, much of the conversation was so technical that I couldn’t grasp it well – what with forward markets and power purchase agreements and all that.

So, I pretty much listened in as Devin (who is freakishly intelligent) debated the details with DME’s top executives. It was fascinating. It was the kind of “trial of strength” that I wished this plan had been subjected to more publically and earlier on.

For me, the most telling moment came when we got talking about risks. They handed us a graph from just the day before that showed electricity prices spiking for about twenty minutes from the usual $30/MWh all the way up to $1,000/MWh. It turns out that almost none of the wind power forecasted for that day (by predictions made just the day before) showed up. The conversation went something like this (reconstructing as best I can from memory – not direct quotes).

DME: See, this is why we need a quick-start back-up plant…to shield us from these kinds of market swings.

Devin: But by the time you start up the gas plants that spike would have already gone down.

DME: No, we can get these things fully operational in just a few minutes with very little start-up costs.

Devin: Ok, but such a short swing like this looks scary but averaged across the whole day it pretty much washes out. It might be like $1 extra, or mere pennies for a rate payer.

DME: Ok, but if a pipeline were to freeze (as happened a few years ago) or if it is summer and a nuclear plant goes down, then a spike like this can be even higher and it can last for hours or days…even weeks.

Devin: But what is the likelihood of that happening to such a degree that it actually costs more than the money you’ll be putting into these power plants?

DME: Who can say? But we have an obligation to deliver reliable and affordable electricity to our customers. We cannot expose ourselves to that kind of risk…

Devin: Of course, there are also all sorts of risks in investing in a technology dependent on a volatile fuel. Have you considered this or that [things Adam can’t quite grasp]?

DME: Yes, we did consider this and that and it turns out that what we have proposed is the best path for maximizing renewables, minimizing rates, and minimizing risks to reliability.

(I am reminded of Councilman Gregory’s response to our op-ed: “You think DME hasn’t thought of all this stuff?!” Yes, clearly they have, but I think it is important for the thinking to be more public in nature…remember how the public helped DME find a better route for a transmission line several years ago…)

 

That’s when they described the gas plants as analogous to a life insurance policy: “The best case scenario is that we never run these plants, because that means we are getting cheaper electricity on the market.” They also said that something like 90% of the value of the gas plants is in the fact that they allow us to make long-term power purchase agreements for wind and solar. In short, their value is that they take the risk out of a major investment in intermittent electricity sources.

There was a wrinkle in the life insurance analogy, though. Because, as Devin noted and I think they agreed, actually the best case scenario is that we get our wind and solar cheaply, but market prices are above the cost of running the gas plants. In that scenario, we can run the gas plants at full capacity (I think that is something like 37% of the time) and sell electricity on the market for a profit.

We then talked about the environmental impact of the gas plants. One of the interesting claims they made there was that they won’t contribute to local ozone pollution, because ozone tends to form a bit further from the point of emission once it mixes in the atmosphere and heats in the sun for a while. So, these plants would likely exacerbate air quality downwind from Denton more than in Denton. But, of course, in the scheme of things these are very efficient plants with lower emissions than anything comparable on the Texas grid. Incidentally, they use a mere handful of gallons of water to operate, whereas other gas plants use millions of gallons of water.

The future of Gibbons Creek coal plant is still undecided, they said. My thinking on this is that if the Renewable Denton plan moves forward, we will no longer use it but it will probably stay operational. However, I think that means that some other dirtier and less-efficient source of electricity will be squeezed out of the market. As we shift our demand to more wind and solar, we open space for others to use Gibbons, which is surprisingly a better environmental performer than some other coal plants.

A couple of other points are worth noting. First, they claimed that in addition to ending our use of coal, the plan will entail the construction of between 2 to 4 new wind farms and 2 to 4 new solar plants. And, second, the hope is that they can soon start working on constructing community solar power projects (which would be in addition to the ones just mentioned) on the extra land surrounding the gas plant sites. They are also hoping that battery storage technology improves such that they might use some of the land for that purpose in the future.

They are definitely keen to get to even more renewable energy – they just don’t think that the 100% renewable option right now is a prudent one from a cost stand point.

This is a decision that obviously entails lots of technical stuff. Yet woven into all of that are values and interpretations. For example, just how risk adverse should we be? And of course it is laden with uncertainties. For example, I don’t think we can know the overall environmental impact of this plan because it is so open ended – we may add more renewables (when?) and we’ll burn more or less gas depending on market conditions.

I don’t know how I would vote if I were on City Council. I just talk myself in circles on this issue. It sounds like the clock is ticking, though – interest rates and exchange rates are favorable but perhaps not for long. A decision is likely imminent.

For now, though, there is still time for questions. I look forward to the discussion next Tuesday at the public hearing.