Truckee Donner PUD shouldnt bet on coal subsidies for long
Anyone who paid attention to the results of the election last Tuesday would strongly oppose Truckee entering into a 50-year contract with a Utah-based coal-fired power plant. Im not talking about the ethical or environmental considerations. I am talking about fiscal and legal responsibility.
The Senate Environment and Public Works Committee will be taken over by Barbara Boxer. She and other Democrats (Henry Waxman, etc.) now looking at leadership positions in House and Senate committees have already sponsored half a dozen bills to impose mandatory limits on carbon dioxide emissions. With control of both the House and Senate, these legislators have vowed to put national climate change legislation at the top of their agendas, and the majority will follow them. Nine of the League of Conservation Voters Dirty Dozen lawmakers were defeated, while eight of Congresss nine strongest environmental advocates held their positions. Both houses of Congress will consider rolling back billions of dollars in giveaways to the oil and coal industries in the 2005 Energy Policy Act and increasing incentives for renewable energy and conservation. There will likely be discussion of imposing carbon taxes on energy production. Coals apparent lower costs will evaporate if state or national regulations changed to impose taxes or fees on such power.
The day after the election, the renewable energy sector was one of the stock markets three biggest winners. PowerShares WilderHill Clean Energy Portfolio (PBW), which tracks stocks developing renewable energy sources, rose 1.4 percent. VeraSun Energy stocks rose 9 percent.The Rand Corporation just released a study concluding that falling costs of ethanol, wind power and other forms of renewable energy predict such sources could furnish as much as 25 percent of Americas conventional energy by 2025 at little or no additional expense. Why would we limit ourselves from taking advantage of that trend? Since January 2001, government policy including wars and tax cuts has helped increase the factors that drive profitability for coal, profitability, which has grown 40 percent in that time period. Without these government subsidies, in a free-energy market where the environmental costs of producing energy with coal are accounted for, what will the price of coal do? It will soar, and well be stuck paying those prices.Across the country candidates won by making the case that a new energy future, new energy technologies, a good economy and new good jobs all go hand-in-hand. California passed two laws within the last few months making the same case. Peratas SB 1368 prohibits utilities from entering into long-term contracts to purchase energy from power plants that do not meet a greenhouse gas emission standard (signed Sept. 29 to take effect Jan. 1, 2007) and Nezs AB 32, will cut Californias greenhouse gas emissions by one-fourth by 2020 (signed Sept. 27).
What happens when municipal utilities around the state try to evade the intentions of state legislation? The legislators give more and more power to the state regulators. Is this what the Truckee Donner PUD board wants? Personally, I favor local control over such decisions. Finally, several municipal utilities in Southern California have signed or are contemplating signing new long-term contracts. What is the key difference between the rationale of these utilities and Truckees? They are agreeing to buy energy from existing power plants, arguing that the energy will be produced no matter what, so they might as well buy it. Even this weak argument skirting around the ethical considerations of coal power doesnt work for Truckee. Truckees contract would be an investment in a traditional coal-fired power plant that wont even be built for six years.
Why are we investing in coal-powered energy development in Utah when we are in the most appropriate place on earth for biomass energy production? When we need good local jobs? When energy money spent here will recirculate six to 15 times in our local economy? Why isnt the biggest municipal utility in California, the Los Angeles Department of Water and Power, seeking to renew its contract? David Nahai says its because the legislature has spoken clearly on this issue, and they are not worried about replacing the citys cheapest power source because there will be other options in 2027.As a local ratepayer, I think we should wait for these other options. A long-term coal contract is incredibly short-sighted. In 50 years, I will be 78. Will I have to wait my whole life for a reassessment of our energy options? I hope you will make decisions today based on a more optimistic vision of my future in Truckee and on this planet. Betony Jones worked for the Clinton and Bush administrations in the White House Office of Science and Technology Policy. She has a masters degree in environmental science and policy from Yale University and has lived in Truckee for two years.