Tuesday, March 18, 2008

News From the Week of March 17, 2008

Energy Department Floats Public-Private Plan for Nuclear Waste Dump At Yucca Mtn.

Boston Red Sox Join Solar Energy Team

DOE: Expect License Application For Yucca Mtn. After All

Renewable-Energy Supporters Rally in Reno Against Coal Plants

Wal-Mart's Latest Green Store Cuts Energy Use Up to 45 Percent

Cost of Coal Power is Rising

Energy Department Floats Public-Private Plan for Nuclear Waste Dump
- By ERICA WERNER Associated Press Writer
WASHINGTON - Mar 13, 2008 (The Associated Press)

Energy Department officials trying to promote nuclear power are suggesting that private industry assume some responsibility for the country's nuclear waste.

Edward F. "Ward" Sproat said Thursday that the idea could ensure more stable management and financial support for the long-delayed Yucca Mountain nuclear waste dump project in Nevada that he manages.

"I do think that providing some sort of an organization with legislative fiat that provides that stability and fixes some of these institutional problems is a good idea," Sproat said after addressing a conference of nuclear regulators. "But it's got to be done right." He heads the Energy Department's Office of Civilian Radioactive Waste Management.

Even Yucca Mountain supporters say stability has been lacking at the 77,000-ton repository planned 90 miles northwest of Las Vegas. It is intended as the resting place for the spent reactor fuel and high-level defense waste piling up at power plants and other sites around the country.

Yucca Mountain's most ardent critic, Senate Majority Leader Harry Reid, D-Nev., is in position to engineer annual budget cuts of $100 million or more.

Sproat suggested a public-private partnership modeled on, for example, the Tennessee Valley Authority, the nation's largest public power company. The TVA was created by Congress and has a board of directors appointed by the president and confirmed by the Senate, but raises its own money and manages its own employees.

A power point briefing prepared for lawmakers by Dennis R. Spurgeon, the Energy Department's assistant secretary for nuclear energy, includes a slide showing a "nongovernmental entity" that would manage nuclear waste disposal and fees from nuclear utilities in concert with a still undeveloped recycling program supported by the Bush administration. The power point was obtained Thursday by The Associated Press.

Yucca Mountain's opening date has been delayed repeatedly since the original 1998 goal. Sproat had pegged 2017 as the best achievable opening date. But that has slipped and he could not give a new one on Thursday. He did say that plans to submit a required construction license application to the Nuclear Regulatory Commission by the end of June are back on track, after coming into doubt this year because of Reid's budget cuts.

Meanwhile, liability to taxpayers is surpassing $7 billion because the department contracted with utilities to take possession of their nuclear waste beginning in 1998.

The idea of a public-private partnership to manage Yucca Mountain and other elements of spent fuel disposal has support from the nuclear industry and is garnering some interest on Capitol Hill. But the change would require legislation that also would have to deal with the liability to utilities and dedicating money from a special nuclear waste fund paid into by utilities, according to Sproat. No one thinks that could come about anytime soon.

"A move like that would greatly enhance the chances of success of the Yucca Mountain project and recently Congress is not inclined to enhance the success of the Yucca Mountain project," said Steve Kraft, senior director for used fuel management at the Nuclear Energy Institute.

Reid has long been declaring Yucca Mountain dead and his spokesman said no new plan would change that. "It's hard to privatize something that's not going to be built in the first place," said Reid spokesman Jon Summers.


Boston Red Sox Join Solar Energy Team

Posted by David Beard, Boston.com Staff March 14, 2008 05:55 PM

Batter up for solar!

Construction will soon begin on a solar hot-water project at Fenway Park, an energy official said. The move is one of several efforts to make the park more environmentally friendly before its 100th anniversary. The disclosure came Thursday at a solar energy session of the Building Energy ‘08 conference.

According to Christina Halfpenny of National Grid, the Sox will be able to meet 37 percent of its water-heating load in a system that will take 16 years to pay for itself, after incentives.

The Red Sox would not confirm the details on Friday. "It would be premature to make a comment at this point," a team spokeswoman said. She added that the team plans to make an announcement next month that will discuss some of the changes fans will see at Fenway Park during the 2008 season, including "greening" initiatives the team is pursuing.

In September, the Sox announced it would explore making Fenway Park "even more green" through a series of environmental initiatives before Fenway's 100th anniversary in 2012.

Among the items considered at that time, beyond some rooftop solar panels, were recycling, improved refuse removal, and the installation of more energy-efficient lighting.

Editor's Note: The Sox will join the Cleveland Indians, and, in the National League, the Colorado Rockies and the San Francisco Giants in using solar power at their home fields.


DOE: Expect License Application After All
Mar 17.2008 (Las Vegas Review - Journal)

The Energy Department has readjusted its Yucca Mountain work plans after a deep budget cut and will be ready after all to apply for a license in June to build a Nevada nuclear waste repository, the program director said Thursday.

Managers postponed work on a Nevada rail line and other segments of the Yucca program, and redirected money and personnel to reach the most pressing goal of meeting a June 30 license application deadline, according to Ward Sproat, director of the Office of Civilian Radioactive Waste Management.

Applying for a construction license has been a long-sought but out-of-reach milestone for DOE at Yucca Mountain. The department has encountered legal and budget problems, and a number of internal missteps in recent years.

Speaking at a conference organized by the Nuclear Regulatory Commission, Sproat expressed confidence the application will pass initial muster to be docketed by the NRC for more thorough safety reviews and hearings.

Cutbacks will reduce the work force from 2,600 to 1,500-1,700. The Energy Department has singled out key scientists and engineers within DOE, the U.S. Geological Survey, the national laboratories and contract firm Bechtel SAIC who will be needed to defend the license.

"We have identified who those people are to make sure they know their jobs are not in jeopardy," Sproat said. "We have an army of national lab PhDs and engineers on our defense team."

Sproat's upbeat assessment came minutes after a lawyer who represents Nevada in its ongoing battle against Yucca Mountain declared the program is on a "death watch" and is destined for failure.

Martin Malsch, of the firm Egan, Fitzpatrick & Malsch, said DOE will continue to face increasingly severe budget problems. He said DOE's application will be rushed and incomplete and predicted a "huge dispute" over whether it should be accepted for review by regulators.

Beyond that, Nevada is poised to challenge DOE's qualifications andother key aspects of the project, he said. On top of that, both Democratic presidential candidates have pledged to stop the program if elected.

"Yucca Mountain's breaths are short and its heartbeat is faint," Malsch said. "I really don't think it has very long to continue." In response, Sproat said: "The death watch is going to continue for a very long time because I see this program being very alive and well."

The Energy Department was sent back to the drawing boards late last year when Congress cut the 2008 Yucca Mountain budget by $108 million, a 22 percent reduction.

Sproat initially expressed doubt DOE would meet its deadline, but he said managers deferred work on all but the most pressing tasks. For instance, work on a proposed Nevada rail line to the site has been pushed back. To save money further, technical specialists were rotated in for short periods to perform specific tasks and then let go, Sproat said.

Questions remain about the repository, which would need billions of dollars to be built. Sproat confirmed the Bush administration is considering a proposal to reorganize the Yucca project and other nuclear waste programs into a government-chartered corporation similar to the Tennessee Valley Authority or the Bonneville Power Administration.

Promoters contend such an organization would have the advantages of a private business to hire and fire managers, set salaries to attract talent and promote accountability. Sproat said it would stop a revolving door that has seen numerous top managers trying to run the Yucca program for short terms.

But such a big change would require a number of fundamental changes and approval by Congress, which might not be willing to give up control.

The Energy Daily in a Feb. 26 story quoted sources saying the DOE proposal has been at the White House for consideration since at least December. Sproat could not confirm that, saying he understood the concept still was being mulled within DOE.

"I personally don't expect we are going to make anything significant happen on this over the next three to six months," he said. Steve Kraft, senior director for used fuel management at the Nuclear Energy Institute, said a "move like that would greatly enhance the chances of success of the Yucca Mountain project and recently Congress is not inclined to enhance the success of the Yucca Mountain project."

Sen. Harry Reid, D-Nev., long has been declaring Yucca Mountain dead and his spokesman said no new plan would change that.

The Associated Press contributed to this report.Contact Stephens
Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or
(202) 783-1760.

(c) 2008 Las Vegas Review - Journal.


Renewable-Energy Supporters Rally in Reno Against Coal Plants
By MARTIN GRIFFITH Associated Press Writer

RENO, Nev. - Mar 15, 2008 (The Associated Press)

A group of renewable-energy supporters rallied Saturday in Reno against plans to build three coal-fired power plants in eastern Nevada near the Utah border.

Speakers urged Gov. Jim Gibbons, Attorney General Catherine Cortez Masto and other local and state officials to join Sen. Harry Reid, D-Nev., in opposing the use of coal and supporting development of alternative energy sources.

They said coal-fired plants spew out pollutants that contribute to global warming, and a shift to renewable energy would create jobs in a state rich in geothermal, solar and wind power.

"As a mother, I am concerned about mortgaging our children's energy future with polluting coal plants instead of investing into positive renewable energy resources", said Sara Bruso of the Nevada Clean Energy Campaign. "Nevadans are looking to (Gibbons and Masto) for leadership on this."

About 50 people gathered at the downtown's Brick Park for the rally. They placed pictures of windmills and solar panels into a plastic "pot of gold" as a symbol of the bright future the new technologies promise for Nevada.

The rally comes as Sierra Pacific Resources, Dynegy-LS Power Group and Sithe Global Power are pursuing separate plans to build the coal plants near Ely and Mesquite. Gibbons, a Republican, has said the proposed coal plants will burn cleaner than older plants and are crucial for economic development.

Demonstrators urged Masto, a Democrat, to recommend a suspension of state proceedings on the plants. "Senator Reid has already taken a strong stand on this and our state and local officials should do the same," said state Demographer Jeff Hardcastle, who spoke as a private citizen.

David von Seggern of the Sierra Club praised the Reno City Council's recent resolution encouraging the use of solar power in city buildings.

Coal plants provide just over half of the nation's electricity. They also are the largest domestic source of the greenhouse gas carbon dioxide, emitting 2 billion tons annually, about a third of the country's total.

Wal-Mart's Latest Green Store Cuts Energy Use Up to 45 Percent
By MARCUS KABEL Associated Press Writer

BENTONVILLE, Ark. - Mar 18, 2008 (The Associated Press)

Wal-Mart Stores Inc. will open its latest generation of energy-efficient test stores this week with a Las Vegas Supercenter that uses new cooling technology to cut overall energy use by up to 45 percent.

The Las Vegas store opening Wednesday builds on advances in earlier pilot stores that reduced energy use in areas including lighting, refrigeration and water flow.

The previous pilot stores in the Midwest cut energy use up to 25 percent compared to a typical Supercenter built in 2005, the year Wal-Mart launched a broad environmental program to reduce energy use and packaging waste and to sell more sustainable products.

Wal-Mart said the new Las Vegas store adds to those savings with a new cooling system based on water evaporation for total energy savings of between 35 percent and 45 percent.

Wal-Mart has said it is the biggest private user of electricity in the world and has huge potential to cut back on greenhouse gases from fossil fuels burned to create electricity. It aims to use technologies proven in the pilot stores to develop a prototype in 2009 for all new Supercenters
that will be between 25 percent and 30 percent more energy efficient.

An outside engineering and efficiency expert said Wal-Mart's advances in saving energy, including the new Las Vegas store, are leading the field for big-box retailers. "This is not just a baby step. This is a big step," said Terry Townsend, past president of the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

Townsend said Wal-Mart's pilot stores are important because they show other retailers how to use available technology to improve energy efficiency. Wal-Mart says it is sharing its lessons with retail industry

The latest store is built specifically for the arid climate of Western states, where water evaporates faster than in the more-humid East. It uses rooftop cooling towers to chill water that then runs in conduits under the floor of the store. The radiant cooling from the floor
replaces traditional electricity-powered air conditioning.

The store also incorporates innovations from the previous pilot stores that include recycling heat from refrigerators and combining low-power LED lights in freezer cases with sensors that turn off those lights when no customers are around.


Cost of Coal Power is Rising
Mar 20, 2008 - The Kansas City Star (Kansas City, Missouri)

Electric bills are poised to soar for customers of utilities building coal-fired power plants.

The plants, long-trusted purveyors of low-cost power, no longer seem like such good bets because of soaring construction costs and the surging cost of coal. Moreover, many think Congress will impose penalties on emissions that contribute to global warming.

To be sure, some in the electric industry still view coal-fired plants as the best low-cost option to provide year-round power. But the growing costs, driven by burgeoning global demand, have prompted warnings of "seismic shifts" in the way the industry views the plants.

"It's a very tough environment right now," said Lawrence Makovich, a vice president for Cambridge Energy Research Associates.

Topeka-based Westar Energy, for example, was so troubled by the changes that it tabled plans for a coal-fired plant. But the shift is being played out in a more dramatic fashion at Kansas City Power & Light, which is leading a group of four utilities already building Iatan 2, an 850-megawatt coal-fired plant near Weston.

The plant, which was originally estimated to cost $1.3 billion, already is $400 million beyond that figure and is expected to go up further. In the wake of "cost pressures," KCP&L now is "refocusing" its Iatan 2 budget and could release a revised estimate as early as April.

"What we're seeing is that increased pressure on prices," said Michael Deggendorf, a vice president for KCP&L.

The utility has faced questions about mismanagement of the construction. But the utility has denied that and added that KCP&L has fixed prices on some components of Iatan 2, which should help moderate the increased cost.

Even so, the eventual cost of the plant could be daunting. The cost of similar plants built elsewhere have doubled or more. That could mean that Iatan 2 could ultimately cost $2.6 billion, plus financing expenses.

That would set the stage for a rate shock for KCP&L customers, which will be responsible for paying for a majority of the plant. At the original price of the plant, KCP&L estimated that rates could go up 20 percent. But a rate increase of as much as 40 percent is conceivable if costs mount as much as at other plants.

Such a spike in electric rates would have implications not only for the utilities and their customers but also for economic development. Affordable electricity has served as a major selling point for Kansas City in attracting business investments.

"The increased cost is an issue that we're facing all over the country," said Jim Zakoura, an area lawyer who represents industrial customers.

Cost vise

KCP&L isn't alone in getting squeezed by coal-plant costs. The cost for the two generators that Sunflower Electric Energy Corp. wants to build in western Kansas has more than doubled to $4.2 billion, according to industry experts.

David Schlissel, a senior consultant with Synapse Energy Economics, said cost issues facing utilities are akin to building a new home without knowing how much it would cost, how much the taxes would be or the cost of financing.

"It is a worn-out cliche, but I call it a train wreck," he said.

KCP&L officials said a specific cost estimate for Iatan 2 would not be available until the current review was completed. But they said it would be competitive with other new coal-fired plants. Iatan 2 could be open as early as 2010.

"We're moving forward," said Matt Tidwell, a spokesman for KCP&L.

The same goes for Sunflower Electric, which along with two partners is pushing plans for 1,400 megawatts of coal-fired generation in Kansas. Thecontentious project was halted last fall by the state's top environmental regulator. The project was resurrected by the Kansas Legislature, but that decision now faces a gubernatorial veto.

Steve Miller, a spokesman for Sunflower, said not building new coal plants could affect the economy because Americans continue to use more electricity.

"Does that mean we are going to continue to run dirty old power plants and we can't grow the consumption of electricity?" Miller said. "Surely America is not going to get to that point." Others are taking a more cautious approach.

Westar in late 2006 said it was postponing plans to build an 800-megawatt coal-fired plant. The plant's cost had initially been estimated at just over $1 billion. But rising costs for materials and labor increased the price to $1.7 billion. Today it would be more than $2 billion, said Jim Ludwig, a vice president for Westar.

In addition, the possibility of a carbon tax on greenhouse gases could cost utilities dearly. Even the price of coal can no longer be safely predicted. "All these things are converging," Ludwig said.

Westar decided to postpone the plant indefinitely. It sketched out its plans in a document released in February called "A Strategic Plan for Uncertain Times."

The document mentioned "seismic shifts" in the industry and recommended a plan to keep demand down as much as possible with energy efficiency. The company could improve the distribution of electricity on its lines so less power is lost. Meanwhile, consumers would be encouraged to conserve.

Westar also plans to have 300 megawatts of wind energy in operation by the end of the year. Gas-fired plants, which cost less to build but more to fuel, also would be used more by Westar. The utility relies on natural gas to generate 4 percent of its power. The national average for natural gas is about 10 percent.

Concerns about coal plants are spreading. "You've got to ask: 'Do you think we have reached a point where it economically doesn't make sense?' " said Michael Dworkin, law professor and
director of the Institute for Energy and the Environment at Vermont Law School.

The stakes are enormous, especially for utilities that are in the middle of constructing coal-fired plants.

Wall Street investors last month announced that loans to build coal-fired power plants were risky because of escalating costs and uncertainty about environmental regulations. The U.S. Department of Agriculture has stopped providing loans and subsidies to rural and municipal
utilities to build coal plants.

In a letter to Rep. Henry Waxman, a California Democrat, the agency's administrator wrote that there would be no loans until the agency could "develop a subsidy rate that reflects the risks associated with the construction of new base load generation plants."

Ripples from such decisions are already being felt. This month, Associated Electric Cooperative, whose territory includes all of Missouri except Kansas City and St. Louis, decided not to build a
plant 50 miles east of Kansas City. The cooperative was turned down for a federal loan.

In 2004, Southern Montana Electric Generation and Transmission Cooperative wanted to build a 250-megawatt coal plant. By last fall, the estimated cost of the plant was $750 million, said Jay Fletcher, spokesman for the federal government's utilities program.

On Feb. 19, the cooperative's request for a loan was turned down.

"One of the things we cited is the extremely high cost of the project," Fletcher said.

Fletcher said that in each of the past four years, the cost of building a power plant has gone up 30 percent. The measurement used to estimate costs reveal the increases. A few years ago, it cost about $1,500 a kilowatt hour to build a plant. The cost to build an almost 1,000-megawatt plant planned by AMP-Ohio is now at $3,000 a kilowatt hour.

Then there is the fuel.

Coal is still considered the cheapest fuel except for nuclear. But coal prices have gotten volatile.

In 2003, a ton of coal delivered to electric utilities was $24.74 a ton. Last year, it was $36.09, an increase of nearly 50 percent.

Prices are being pushed higher by burgeoning global demand driven by emerging economies such as China. Some estimates call for coal prices to eventually be less volatile, but others expect prices to continue to increase.

"There's not going to be a reduction short of a war or plague or radical new technology," Dworkin said.

Carbon taxes

Soaring construction and coal costs are known factors for the utility industry. What is less certain is when Congress will enact global-warming regulations requiring utilities to pay for emissions of CO2, a greenhouse gas.

Waxman and fellow Rep. Edward J. Markey, a Democrat from Massachusetts, filed a bill Tuesday that would place a moratorium on all new coal plants until technology is developed to control global warming emissions or CO{-2}.

"This bill will make companies prepare for the future and prevent them from building low-tech, coal-fired power plants before a global warming bill is passed," said Markey, chairman of the House Select Committee on Energy Independence and Global Warming.

One approach being considered is used in Europe, where emissions can cost up to $30 a ton.

"Federal regulation of greenhouse gases is no longer a matter of if --it is a matter of when," Schlissel said in testimony submitted to the Kansas Legislature.

Schlissel calculated that the CO{-2} emission penalties for Sunflower's proposed 1,400-megawatt plant could be from $67 million to $334 million annually by 2015. By 2030, the range is predicted to be $387 million to $966 million.

Experts do not think that the technology to prevent CO2 emissions will be available until at least 2030 -- if ever.

Miller, of Sunflower, discounted the cost of CO2 regulations. "I cannot believe our Congress, and our Legislature, is going to allow the price of electricity to get so high the common person can't afford to pay their bill," Miller said. "In the end, it is all going to be about what the ratepayers are going to pay. I can't see Congress putting trillions of dollars on the taxpayers."

To reach Steve Everly, call 816-234-4455 or send e-mail to severly@kcstar.com. To reach Karen Dillon, call 816-234-4430 or send e-mail to kdillon@kcstar.com.

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