Thursday, September 22, 2011

Zylstra: Holland Community Energy Plan Finalized


Monday night was the formal presentation of the Community Energy Plan, proposed by consultant Peter Garforth working with local government, utility and business leaders, to the Holland Sustainability Committee.

In a previous post, I gave a short overview of the plan in its mid-stage. The final report didn't vary a whole lot from that preliminary report. It did, however, provide a recommended course of action, as well as financial implications of that action, and those of the other arranged scenarios.
In my overview, looking at the different pros and cons, I had posited Scenario B as the preferable as well as the more likely, scenario: seems fairly evident that Scenario D, which is basically the CFB Coal option has substantially more drawbacks and much less in its favor than Scenario B, the more alternative, renewable energy heavy option. I think the strongest case against the CFB plant is just the amount of financial risk and negative incentives - for efficiency and conservation - that it introduces into the equation. Likewise the greatest argument for small scale renewables is the mirror opposite, that the investment scalability gives it a greater flexibility and involves overall less financial risk and greater incentives for conservation and positive environmental outcomes.
The final proposal by the Project Work Team comes to many of the same conclusions, and has the benefit of being able to put some economic analysis behind it. The more interesting of these was the discussion regarding what would be the preferred energy source for the city going forward, ie, Coal in the form of  a 70 Megawatt CFB option or Natural gas in the case of a 70 megawatt Combined Cycle option. Both would be sited at the current DeYoung Power plant location, in part in order to continue being able to supply the downtown snowmelt system but also because whichever option chosen would be the source of a “district heating” system that could include Hope College, Holland Hospital and the Holland Community Aquatic Center. As a side note, whichever scenario chosen would also include retrofitting homes in the city with energy-saving measures, such as insulation and newer windows, heating and cooling systems. Such projects could begin in the historic district, where 150 homes would be targeted for upgrades within two years. So the real difference here is to what the main source of electrical generation will be, that is, the CFB or CCGT option.

The following table shows the upfront capital costs of these two options, as well as some of the subsidiary generation options:

The initial capital costs for the CFB option are over 150% greater than those of the Combined Cycle option, and that $270M for the CFB is, as I understand, a one-time build, meaning that it's fairly upfront costs. The $105M is set to be spent over a number of years as demands warrants on additional turbines. This is obviously a tremendous point in favor of the CCGT option. 
This lower capital cost, in the case of the CCGT is offset, at least in part, by the cost of fuel  for each generating option. The following table combines the lifetime capital cost and merges with  the fuel cost over the same time to get at a comparable levelized cost:

The analysis gives three different costs, cost of electricity of each option, cost of electricity with a Greenhouse Gas Penalty regime in place and then the cost of district heating, were it chosen, for each option.  It also gives them at three points in time: 2016, 2030, and 2050. A quick comparison of each at the 2030 mark:
                             Cost MwH    Cost MwH w/ GHG Penalty    Cost MwH w/District Heating
70 MW CFB:         $101.2                       $180                                              $110.2
70 MW CCGT       $91.5                         $125.3                                           $105.3

Obviously, when we start looking at things 20 years out, it's really hard to be confident in a forecast, but what is really striking is what happens to the Coal vs. Natural gas options with a carbon tax in place. By 2016, when production is set to begin, I doubt we'll have one, but it's hard to believe that by 2030, when CO2 levels are set to rise by over 40%, that we won't have one. We almost had one a few years ago, and as the global ill effects of carbon emissions become more well accepted, it's almost a near certainty that we'll have one then. That future cost difference,  plus the financial flexibility that staging the new turbines offers, for me, puts the discussion very much in favor of the CCGT option.

A final point on Externalities:
The question of external costs for both Coal and Natural Gas extraction and combustion were brought up in both sessions as questions, but, outside of the calculation of the cost MWh w/ GHG Penalty, these costs were not part of the report.

Douglas Zylstra is a small business owner, Vice-Chair of the Ottawa County Democratic Party, and a contributor to West Michigan Politics. Connect with him on Facebook HERE 

Hall: Snyder Recall Will Be Shot Down In Flames

Gov. Snyder
Despite his historic twenty point victory only ten months ago, special interests are hard at work to send Governor Snyder packing from Lansing and back home to Ann Arbor. They can't get him on East I-96 fast enough!

Backed by the Michigan Education Association, a recall against the Governor is underway.

Hide yo' grandma! Hide yo' kids! Cause Governor Snyder's going after everybody out here! Except evil big business of course....

Unfortunately, much of the "reasons" for the recall are pure BS.

Let's start with the controversial Emergency Manager Bill.

If one listened to recall backers (or Rachel Maddow), the Governor is "nerding it up" in Lansing by plotting ways to take over your town and/or school district.

Meanwhile, back in the real world... The same amount of Emergency Managers exist today that existed under Jennifer Granholm: four! The Jackson Citizen Patriot opined on the subject and layed it out brilliantly.

"When Rick Snyder took office as governor, emergency financial managers were picking through the rubble of four school districts’ and cities’ budgets in Michigan. His administration asked for and got a new law giving these managers new power. There were protests and an attempt to recall Snyder — and yet only those four remain under financial managers’ control.

That fact was made clear in a new Associated Press story, which pointed out how the new law has not reached as far as some predicted. Maybe the law’s critics can take a deep breath and relax.

Only one entity, the Highland Park school district, today is being considered for a financial manager. State officials turned down requests to review finances from officials in Allen Park and here in Jackson.

The recent law is either less of a threat to troubled cities and schools than critics say it is, or maybe it is just doing its job."

All the entities that have been taken over deserve it completely, and they were given time and time again to get their act together.

Another one of the MEA's favorite talking points is the fact Gov. Snyder reduced some financial assistance to school districts. Not only can Michigan's school districts afford the reduction through smart reforms, they can also use the opportunity to retool an education system in Michigan that is still mostly stuck in the 20th Century.

While almost every other area was cut by around 10%, education was only cut by around 2%. It's interesting to note that Gov. Granholm also took hundreds of millions from schools, but the MEA didn't try to recall her...

Regarding senior pensions, why should seniors who are pretty well off get by tax free on their income, while hard working folks bringing in a lot less are taxed?

Listen to the MEA, and where did Grandma and Junior's money go? Big business!

Anyone who listened for two seconds to the Gubernatorial election knew Republicans were getting rid of the Michigan Business Tax. Snyder, calling the MBT the "dumbest tax in the country," repealed it. However, he also axed the loopholes big businesses were cashing in on, meaning they still have to pay the same or in some cases, more in taxes. Small businesses are the true beneficiaries of the Snyder tax overhaul.

Even if the MEA can get the amount of signatures needed to waste the state's money and have a recall election, they will not be successful. Snyder will win the day with Independents, moderates in both parties, and will retain enough support from the Republican base to make it all the way until 2014. At that time, when all the lies haven't come to fruition and the rhetoric is overshadowed by results, Governor Snyder will win four more years as the state's "CEO."

Brandon Hall is the Managing Editor of West Michigan Politics.
Read more about him and the WMP team HERE

GH Tribune: Cherette: Snyder "One Tough Cookie"

(Granholm takes over Benton Harbor)

Op/Ed: Snyder isn't plotting to take over your school district

Thursday, September 8, 2011

CHIODO: Obama "jobs plan" is Stimulus, Part Two

What exactly is Obama’s plan?   He has suggested a “balanced approach” but what is that?   Allow me to gaze into my crystal ball and make a prediction.   After trying to lead from behind and following his vacation, he will enlighten us.    Is this prompted by falling support among his staunchest supporters (black community) and across-the-board, historically low approval numbers?

Whatever the reason, he is faced with an impossible task of pairing his ideology with something that will “stimulate” the economy.  It must be a bold move and forward looking with no reference of results from the past two and a half years.

What will we hear?  In addition to overlooking multiple metrics which are obvious to everyone, he will continue blame the economy he inherited which was “at the brink”.   On top of this, he will blame current Republicans in Congress for ….. What?   What exactly has the current congress done to block Obama?   What proposals has Obama submitted other than vague references of the rich paying their “share”?    Ironically, even if congress had blocked anything, he’d just backdoor his plans with an executive order or impose new regulations without benefit of congress through various agencies.   

By any measure the original stimulus not only failed to spur the economy and jobs. Many would argue it made it worse while destroying economic outlook.    Rather than try anything with proven results (like lower business tax), it is likely he will continue to do that which failed before.   The stimulus was about $1 trillion, part of almost $5 Trillion in spending in less than 3 yrs, requiring a debt ceiling increase to give him more spending room.

To be fair, $5 trillion in three years was not wasted completely.  It cemented support of bankers, unions, government workers and millions of low income assistance recipients.  It allowed Obama to “spread the wealth” among the poor, not-so-poor and of, course big money friends and ideological brothers.

Getting back to the impossible task, it is not brain surgery to create jobs and improve the economy.   By any logical view, it would mean a reversal of virtually every piece of his business killing legislation and executive orders, while ceasing his rhetoric of taxing the rich and demonizing industry which has strangled the private sector.   Most importantly, it would require massive cuts to government programs, dismantle agencies and negate regulatory power.

Sadly, ideology of a Socialist like society will not let him, resulting in his visible foul mood of late.  

The more his is pressured by all sides looking for relief, the madder he gets and seeks to place blame on everyone but himself including the Japanese earthquake and “bad luck”

The biggest source of his poor disposition was the debt ceiling “crisis”.  Rather than a simple, painless process, the media attention made it major epiphany to the American public.  It raised awareness to the real problem (spending and debt).  That the public is aware spending is the problem runs counter to every instinct he has to grow government and increase control.

Jobs is the number one issue and a grand strategy is called for.  His only logical answer?   Propose an historic spending scheme, perhaps eclipsing the original stimulus. 

With daily erosion of the recently increased debt ceiling, Obama desperately needs to raise it further.  His justification will be for a “jobs initiative” which is actually another stimulus, but that word won’t be mentioned).

Hurricane Irene was perhaps seen as a “crisis, which shouldn’t be wasted” and maybe the over hype by every media outlet was part of the plan.  Although less than hyped, it will still provide an excuse for billions in spending to fix roads, etc.

Spending on hurricane damages can only go so far.   He needs an excuse to call for much more spending.   This, I predict will be the crux of his “jobs initiative”

The original stimulus was supposed to be for infrastructure projects, bridges to nowhere and especially “community grants” to impoverished center city areas which will be a promise to shore up support for his based of minorities.  Whatever “investments” are made, history tells us they will have the same results as similar big city projects unfolding over the past 50 yrs.

My guess is he will use the same script for “Stimulus II” with he same predictable results as the first.   His bold “jobs initiative” will make headlines.   Obama will be seen as the Pied Piper throwing money all over in an attempt to be loved.

The spending levels he will ask for will never fly and he knows it. In fact, he will ask for the largest possible amount.  Perhaps even tie it with the next increase to the debt ceiling again to ensure it will not pass congress.   He knows the Republican congress and the great majority of Americans will be against another stimulus as they were against the first.  Against the backdrop of the stimulus’ failure, the opposition will even be greater.

However, among the least informed of his Democrat support it will play well.   With the inevitable 

When congress rejects it, his campaign speeches will proclaim, “I tried to help, but the 
Republicans stood in the way”.   (Teleprompter), “repeat often and blame Republican racism for standing in the way of jobs for minorities”  

For the noisiest and most hard line liberal of his base which wants him to stand firm against any indication of fiscal conservancy, it will increase their support.  However for any moderates or those looking for results oriented options, I doubt they will be charmed.  In fact, they will be turned off by the continued blame game.   

JIM CHIODO is the leader of the Ottawa County (Tea Party) Patriots