McCain Would Raise Energy Bills for Ohio and all America

What happens when your utility is 68% dependent on coal?

American Electric Power said Thursday it must raise electricity rates 45 percent for its nearly 1.5 million customers in Ohio over the next three years, to cover soaring coal prices and the cost of modernizing its systems to keep them reliable.... AEP executives acknowledge that the increases will be tough on consumers already facing high gas and food prices during a slumping economy.

What happens when your country is 50% dependent on coal, and you foolishly adopt McCain's energy and climate plans. Your electricity rates and bills will soar, for several reasons:

• First, McCain supports a cap-and-trade system (at least when he and his advisors aren't talking to conservatives). That inescapably raises coal prices significantly.


• McCain's energy and climate plans include no substantial energy efficiency efforts (see "McCain on energy efficiency: He is Cheney's third term!"). Indeed McCain now repeatedly mocks energy efficiency. Yet, energy efficiency is the only strategy that can keep energy bills from rising in the face of rising rates (see "Efficiency part 3: The only cheap power left"). Efficiency is the only major source of 24/7 power that is far cheaper than current electricity prices -- and five times cheaper than new nuclear, coal, and natural gas plants.


• McCain's climate plan relies heavily on shoving 45 new nuclear plants down the throat of the American public by 2030. Yet nuclear is so expensive that AEP CEO Michael Morris announced last August that the company was not planning on building any new nuclear plants: "I'm not convinced we'll see a new nuclear station before probably the 2020 timeline." Indeed, new nuclear plants are so expensive they are likely to provide electricity at some fifteen cents per kilowatt hour -- or 50% higher than average retail electricity prices in this country (see "Nuclear power, Part 2: The price is not right"). Progress Energy said earlier this year that twin 1,100-megawatt plants it intends to build in Florida would cost $14 billion, which "triples estimates the utility offered little more than a year ago." And that doesn't even count the 200-mile $3 billion transmission system utility needs, which brings the price up to a staggering $7,700 a kilowatt. Under Florida law, to pay for these nukes, Progress Energy can raise the rates of its customers $100 a year for years and years and years before they even get one kilowatt-hour from these plants. Something all Americans can look forward to under President McCain.


• But won't McCain's support for next-generation coal with carbon capture and storage save us? Well, if existing, already-paid-for coal plants are forcing a 45% rate hike, you can imagine how much the price of new, traditional coal plants must be soaring (see "Power plants costs double since 2000 -- Efficiency anyone?"). What about next-generation coal? One very good source of apples-to-apples comparisons of different types of low-carbon electricity generation is the modeling work done for the California Public Utility Commission (CPUC) on how to comply with the California's Global Warming Solutions Act, online here. The research for the CPUC puts the cost of power from coal gasification with carbon capture and storage at 16.9 cents per kWh -- almost double current electricity prices.


• McCain, like virtually all conservatives, has consistently voted against efforts to advance renewable electricity (see "Anti-wind McCain delivers climate remarks at foreign wind company"). Wind power may be the only form of new generation with large-scale near-term potential whose cost is comparable to existing national electricity rates and thus much cheaper than new coal or new nuclear. The Bush Administration itself believes 300,000 MW of wind is possible by 2030 for about 6 to 8.5 cents per kilowatt hour, unsubsidized (i.e. no federal tax credit) and including the cost of transmission to access existing power lines within 500 miles of wind resource. Oilman T. Boone Pickens believes we could have 200,000 MW in 10 years. Solar baseload (also known as concentrated solar thermal power) is probably going to be lowest-cost carbon-free new generation available 24/7. Utilities in the Southwest are already contracting for power at 14 to 15 cents per kWh. The modeling for the CPUC puts California solar thermal at 12.7 to 13.6 cents/kWh (including six hours of storage capacity) -- and at similar or lower costs in the rest of the West. Again, too bad that, contrary to all of his TV ads and public statements where he claims to support "all of the above," McCain in fact has been a strong opponent of renewable energy.

The bottom line is that McCain's policies would ensure soaring electricity rates and bills for Ohio and the entire country.
Obama's terrific energy plan avoids the pitfalls of the McCain plan, since it strongly pushes electricity efficiency and renewable energy.

Comments

[Coal is King]

There is one glaring point left out of authors comments in this article. These people have the some of the lowest rates in the country now and will STILL have some of the lowest rates in country after they are raised.

Energy costs for the fuel that produces it have risen in every sector, coal is still the cheapest form energy available by comparison. Period.

It's not a coincidence that the states with very high coal production and electricity generated by coal or nearby states also enjoy the lowest rates.

http://www.neo.ne.gov/statshtml/115.htm

[Ozarks]

"Progress Energy said earlier this year that twin 1,100-megawatt plants it intends to build in Florida would cost $14 billion". Utilities always understate the real cost of nuclear. Permission to build the Wolf Creek Nuclear Plant in Kansas was "sold" to the Missouri Public Service Commission on the "estimate" that it would cost about $800 million in 1968 dollars. When finished the price tag on Wolf Creek was $3.5 Billion in 1984 dollars. The utilities are not constrained by these hugh cost overruns. They contract out on a "cost plus" basis. So whatever the "cost ", it and "plus' go in rate base and is charged to ratepayers at a rate of return of probably around 11% per year for about 28 years ( alleged "whole life" of a nuke plant). Further, the government subsidy of nuclear waste disposal at Yucca has still not been resolved, physically or real financial cost, nor the shipping of the waste over highways or rail ways with a present lethal half life of over 100,000 years.

[1will]

Part 3

Metals will continue to increase in price. China has had 10 years of double digit economic growth and it's doubtful their building boom will stop anytime soon. After the Cold War ended and the Soviet Union's economy basically collapsed the metals that were formerly used in the Soviet's war machine were largely diverted to China's building boom. This worked for a while but now the metal producing/ mining infrastructure is insufficient for demand. Not enough investment has been put into the system and supply lags. Russia is also re arming using their oil revenues. Their war machine is ramping back up. Demand will no doubt increase even more.
Love Wind Farms and the idea of cheap, inexhaustable power (for about 8 hrs per day) but don't think that wind is the only solution to our energy problem. It can be a part of the solution but T. Boone Pickens and others are businessmen trying to make a buck. Take what businessmen, politicians and enviromentalists say with a grain of salt.

[1will]

Part 1
There seems to be some belief out there that wind power can solve all of our problems.....at least for the 8 hours per day that Wind Farms produce electricity.
Let's pretend that America gets off of the cheap and plentiful popular source of electricity, coal. What do we replace coal with? Solar only works for half of the day (if that). Wind Farms only produce an average of 8 hours per day. Coal fired plants WILL be needed as a backup if nothing else.
Then there is the startup costs of converting to wind. I'm sure everyone has read different accounts of how much land would be needed for Wind Farms if they totally replaced coal. I've read an area the size of South Carolina would be covered but let's cut it by 1/3 to silence arguments.
How are you going to build these Wind Farms? Since 2002 metals have gone up in price even worse than oil. China's building boom has driven up prices alarmingly. In the last 5 years metals have increased the following amounts:
Aluminum +95%
Copper +360%
Gold +125%
Nickel +452%
Steel +117%
Zinc +314%

BTW, Corn has increased +70% for those that love Ethanol.

More to follow-damn 250 word limit.

[deke33]

Gasp, deregulation is a sham, has been a sham and will always be a sham. The bane of corporations, regulatory agencies, that sought from corporations justification for rate increases is no longer in existence. Even the evil Nixon, that paragon of honesty and the free capitalistic system, at one point in his tenure, instituted a whorish wage and price control system. It's effectiveness was greatly diminished because he favored a free price system, but enforced a strict wage regulation, hence it could be described as whorish.

[Liberoservative]

"Michael Morris announced last August that the company was not planning on building any new nuclear plants: "I'm not convinced we'll see a new nuclear station before probably the 2020 timeline."

SCE&G is building two new plants here in South Carolina... they estimate 2016 for completion of the first one....

http://findarticles.com/p/articles/mi_m0EIN/is_2008_April_1/ai_n24967616

[UnbiasView]

So if McCain's policy will raise prices what will Obama's do?

[jbatch]

Because he emphasizes efficiency, it will hold the line on costs -- here's how: carbon cap and trade (and auctions) will raise the price per kW BUT if you use fewer kWs, you break even. Say electricity costs about a third more, but you use a third less. What happens to you monthly bll? Nothing -- you pay the same.

McCain, who also says he'll implement a cap and trade has rejected efficiency, so you'll get the price increase and use the same amount. What hapens to you bill? It goes up.

Get it?

[FreedomBeforeDemocracy]

Lower prices, clean-up the environment, and improve the economy (not to mention simultaneously reduce the deficit, , reduce taxes, and increase government services.) You just have to believe.

[MikeLee7125]

How in the hell can you be against efficiency?
That's like being against healthy diet and daily exercise.
It's like being for high overhead and low sales. Of course he also supports the Bush policies that are devaluing are currency, so maybe it does make sense.

[FreedomBeforeDemocracy]

Efficiency is great, but it doesn't necessarily lead to less consumption. Let's say you can get to Disney Land for $100 of gas. Then you purchase a more fuel efficient car and it costs $60. That's so cheap you decide to go twice as often. Now you consume $120 worth of gas versus $100.

In fact, the best way to limit energy consumption is to make people less wealthy. So, based on that goal, I think both candidates have excellent plans.

[badtimes]

Efficiency doesn't necessarily lead to less consumption- true. However, let's use some electricity based examples:
- you replace your ten-year-old refrigerator with a new one that uses 10% less electricity. So you buy two?
- ditto air conditioning.
- you replace your incandescent bulbs with CFLs. So now you leave your lights on all night?
Although I have to agree- the best way to limit all sorts of consumption is to limit the money available to spend.

[JoeBlough]

Rising prices makes for rising profits. It's what Republicans live for.

[ScottPalmer]

Coal is responsible for more CO2 in the air today than oil and gas combined. A good question to ask the candidates in the debates is:

"Given that coal has produced more CO2 green house gas in our air today than oil and gas combined, what are your plans for curtailing dirty coal plants and only allowing those plants to operate that are capturing and sequestering the CO2 and other hazardous wastes they produce?"

Mother Earth is like a big tanker at sea. If one makes the call too late, right full rudder will not cause the ship to turn before crashing into the distant rocks.

[Romeover]

What we need now is left full rudder.

[RS]

AND B**LS TO THE WALL, BOYS!

(OK, I'll admit it, I "borrowed" that Lauren Holly line from that old comedy "Down Periscope").

[badtimes]

CO2 sequestration has yet to be demonstrated. I think such a mandate is undoable at this time.

[ChaoticGood]

The core problem that exists between the Republicans and Democrats is, strangely enough, global warming. I am convinced that Republicans really don't believe in Global Warming and are merely giving it lip service so people really won't see what they are really up to. If you truly believed in Global Warming, then you would put the priority on non polluting sources of energy and would accept short term high energy prices to save the planet and our species. If you don't believe in Global Warming or are just hiding behind it, you put drilling and oil production and coal production up front and only give some help to non-polluting sources.
The problem here is that the Republicans don't believe in Global Warming or just don't care if we die by the billions, just so long as they can drive their gas guzzlers and pad their stock dividends.
We need to realize this truth and start dealing with the core problem.

[FreedomBeforeDemocracy]

It's not just about believing in global warming, it's about trading off the price of global warming versus the price of trying to stop global warming. John McCain said if we're wrong on global warming there really is no cost, we've just left a better planet for our children (or something like that. I'm paraphrasing). No. There is a huge cost. Use ethanol as an example. The government's meddling in the market (specifically the recent ethanol subsidies) literally caused food shortages as farmers either sold the corn they were already growing for ethanol or shifted to growing corn to sale for ethanol. People were literally rioting. That is a cost. Diverting funds towards more expensive energy means that people have less funds for other things (like eating, education, health care).

Why don't we stop subsidizing anything (we've been subsidizing ethanol since 1978. That's worked out great). Let the market (which is actually the people, you and I) choose the winners and losers in the new energy battle. What if the government chooses wind (after a "contribution" from Pickens) as the winner, while solar was the way? What if it was the other way around? What if the source becomes less important than the storage or transport decisions? The government's decisions will be based on politics. The market's decisions will be based on the market actors, consumers and producers alike.

[GreyFlcn]

re: FreedomBeforeDemocracy

You think the US Energy Market is unsubsidized? Or unpoliticized?
Or that it ever has been?
http://greyfalcon.net/afpc.png
http://greyfalcon.net/subs.png
http://greyfalcon.net/iraqvsenergy.png

Whats important isn't the lack or presence of subsides.
Whats important is competition. A level open playing field.
If thats a raised playing field, so be it. But whats important is that it's level and open.

Another thing to ask of course. Is damaging pollution a Right that should be protected by the Federal government? Or is it a privilege that has a cost?

Bottom Line:
What makes you assume that unsubsidized Renewable Energy is more expensive than unsubsidized Conventional Energy?

(That said, I agree that Hydrogen, Carbon Sequestration, BioFuels, and Nuclear are all porkbarrel pipedreams. But then again, there's always right way and a wrong way to do anything. I prefer Baseload SolarThermal, Baseload GeoThermal, and Plugin Electric Hybrids)

[FreedomBeforeDemocracy]

As a compromise, would you be willing to swap the corporate income and capital gains taxes with a carbon tax? You think it would help the world physically and I think it would help economically (at least the US). I'd much rather tax the production of carbon than the production of wealth and the free flow of capital.

[Blueraidertwo]

The good news is that with all these price increases due to coal as power fuel, we'll be able to rapidly see wind and solar compete economically WITHOUT any need for government subsidies. As if.

Gasoline prices down 47 cents in the last month in S. Calif (demand reduction and stronger dollar). Crude down $32 per barrel in 30 days. How could this be given the evil speculators.

Now let's go do what the Brits and Norwegians do....produce our own natural resource base.

[Annette]

Our utility company gets part of it's power from wind generation. We pay .05 per kwh for regular electricity and .02 per kwh addition for wind generated power. That is a total of.07 per kwr for wind generated power. No subsidies with delivery lines.


Of course as a non profit power company we don't have to pay for stockholders profits, we don't pay our administrators huge slaries, and the entire county votes on the board of directors. Our lines are almost totally buried which results in more reliable electricity. Corporate utilities more expensive, way more expensive.

[creationwaits]

McCain's nuclear power plants are a great idea. Even Obama has now announced some support. I hate to say this, but look to France - hugely reliant on nuclear power, with the cheapest electricity on the continent. True they don't have our coal reserves, but I still can't imagine why nuclear power would be so much more expensive to implement here. Overregulation on our part, or a conclusion of an inaccurate study, perhaps?

[Annette]

It would be more expensive here because we have highly paid executives, stockhilder profits.

I don't have a major problem with nuclear power plants if well run, however running them for profit means that there is pressure to cut corners to increase profits. If they are run for profit there has to be regulation to make sure that in an effort to boost the profits for the next quarter safety comes in second. In France that isn't a problem because they are government run.

[FreedomBeforeDemocracy]

"however running them for profit means that there is pressure to cut corners to increase profits." Not at all. In fact, private facilities have more of an incentive to follow the rules. Why? Because if they don't, the government can take away their profits. The government has no authority figure looking over it. Of course, they have us, but the 2007 congress was re-elected at a 92% rate. While reaching a low of 9% approval, I believe they are now up to 22%. It doesn't appear that easy to "punish" the government when they screw up.

"In France that isn't a problem because they are government run." True that profit won't be a problem, but safety may lack. Wasn't Chernobyl government run? And if you don't think the government cuts corners due to financial reasons, you should look into socialized medicine (although if I remember correctly you already have).

[badtimes]

I just read an article about French nuclear power (80% of their capacity BTW). They've had 92 incidents in the last year, at least one of which contaminated the groundwater surrounding the plant (to the point where crops had to be destroyed and drinking water had to be trucked in). Nuclear power may be part of the solution, but I would be very nervous about having a plant near me.

[JJeff88]

I seem to recall Barack also voicing support for a cap & trade system.

His campaign must be careful not to support or oppose any policy in order to score brownie points vs. McCain in one state but, in doing so, makes bad energy policy elsewhere.

What's needed is a comprehensive multi-disciplined energy package which puts all options on the table (including wind, solar, clean coal, nuclear & geothermal), objectively evaluates each and then assembles the combination that causes the most benefit and least pain to everyone (including Ohio).

I by and large like (and trust) Obama's energy plan far more than I do McCain's. But playing "one-up" vs. McCain merely for one-up's sake would be a bad idea.

[dadw5boys]

Here is how Mc Cain is helping with American Jobs !!!!!!!!

http://obama.3cdn.net/b80f67dbc6480b5057_0tm6va8pw.mp3