Rockport Plant a Complex Issue in 2013

While there was quite a bit of activity in the environmental area in the 2013 Indiana legislative session, there was little heavy lifting and relatively few changes to environmental law. Yes, it is a work in progress, but Indiana business and industry has done so much to reduce its air, land and water emissions that there are fewer and fewer legislative fixes needed. Still, watch for a number of issues to be studied this summer by the Environmental Quality Service Council (EQSC).

Water and wastewater issues are of concern to the Indiana Chamber. Related to that, there were a number of legislative items addressing the wonderful world of water and sewage. The struggle is between those who are not on a sewer system and those who want them to be. There were also several bills to address the overcharging by water and wastewater utilities of those outside the jurisdiction of the municipality. The Indiana Utility Regulatory Commission (IURC) was added to the current court system as an avenue to take a grievance.

Rockport Plant
The energy arena provided much more drama: At the center, the proposed nearly $3 billion Rockport coal gasification facility on the Ohio River in Spencer County, which generated strong non-partisan emotions. Senator Doug Eckerty (R-Yorktown) and Rep. Suzanne Couch (R-Evansville) were the Senate and House champions who stood strong against an emotional plea from those in the Rockport area. The Indiana Chamber is not opposed to the Rockport project and well-recognizes the potential positive economic development with the plant construction, coal mining jobs and related transportation. However, the funding formula for this project is flawed – any losses at the plant would be paid for by the state’s two million residential and small/medium-sized business taxpayers for some 30 years. Speaker Brian Bosma (R-Indianapolis) called the Rockport bill the most complex issue to face the General Assembly this year and, in fact, held the final third reading vote until after the state budget was approved in the House; it was the very last bill for consideration at nearly 1:30 a.m. on Saturday,
April 27. The Indiana Chamber joined forces with the Indiana Manufacturers Association and Indiana Farm Bureau in support of the Rockport bill that, in the end, passed the House by a convincing 70-28 vote and the Senate by a 43-7 margin.

It contains much-needed additional protections to ensure that small/medium-sized businesses and residential ratepayers will not pay excessive additional rates for the natural gas produced by this plant (if it is built).

The major bill for the electric power industry was SB 560. The Indiana Chamber was neutral as the language carried a “tracker” provision which allows an expense to be tracked most directly into a ratepayer’s bill without a rate case. The Indiana Chamber has members on both sides of this issue. Senate Bill 560 allows the expenses related to “transmission and distribution system improvement charges” (TDSIC) to be “tracked” into bills but requires the utility to submit a seven-year plan and present a full rate case to the IURC within that seven years (if it uses the tracking mechanism).

Interim Activity
The legislative summer committees will likely see many environmental and energy issues as some of the legislative attempts were punted to the summer study docket and other items discussed will probably show up on the agenda. Senator Ed Charbonneau (R-Valparaiso) will likely chair the EQSC this summer and has clearly stated his interest in addressing a variety of topics. Some of the items that are already identified that may be studied in the EQSC or other legislative summer study committees include: agricultural fugitive dust, consolidation of all water management functions under one agency, single point of contact for Indiana Department of Environmental Management 401 certification and Department of Natural Resources flood control, small modular nuclear reactors, non-jurisdictional water and wastewater rates and charges, and Indiana’s water plan status.

Bringing the Wind Energy to Indiana

For the May-June issue of BizVoice magazine, I had the opportunity to write some stories on energy issues of the day. When energy is the topic, the focus normally is on the source of the power (coal, gas, nuclear, etc.). One of my pieces dealt with the need for enhanced transmission to move the electricity to where it is needed.

A potential newcomer to the transmission mix in Indiana is the Grain Belt Express Clean Line. This 700-mile overhead, high-voltage direct current (HVDC) transmission line will deliver wind energy from Kansas to Missouri, Illinois, Indiana and states farther east. Starting in western Kansas, the line will connect at a substation near Sullivan in western Indiana.

The Indiana Chamber is supporting Grain Belt, a $2 billion project that the company says would enable $7 billion in investment in new wind farms and provide power for 1.4 million homes. Approximately 200 businesses in Indiana are involved in the wind energy and transmission supply chains.

The HVDC is said to be most efficient over long distances. It requires a narrower right of way, resulting in lower cost transmission and prices. Clean Line will fund the transmission and sell the capacity to wind generators and load-serving entities.

As noted in the upcoming BizVoice article, transmission approval and construction is a long-term process. Grain Belt requested public utility status in Indiana in November 2012, allowing it to operate, manage and control transmission facilities. Commerical operations could begin as early as 2017.

Racing to Discover New Energy Technologies

The combination of motorsports and advanced vehicle technologies has one of its homes in Indiana and the Indianapolis Motor Speedway. The tradition of applying lessons learned at the racetrack to the cars we drive on the road is a long one.

Nationally, federal workers are being highlighted for their work in this area. The subject of this profile is Forrest Jehlik, lauded for his expertise in alternative fuels. An excerpt below and the full story.

Jehlik said many decisions that are made in the political and commercial arenas regarding energy sources and auto technology are not always based on the best science, but driven by economic considerations and the power of vested interests. He said his federal energy laboratory engages in pure research and makes its findings widely available, letting the results speak for themselves.

“We are not paid if hydrogen or ethanol wins out. We look at the technology and the fuels and see what works,” said Jehlik. “That’s what makes us unique.”

 

Keystone Pipeline Being Reconsidered; Tell Your Members of Congress it’s Important

The Obama administration is seriously considering reversing its January 2012 rejection of the Keystone XL Pipeline project. A revised environmental impact statement from the State Department significantly eases environmental objections and opens the door for approval on a new application and revised route for the pipeline.

Opponents, most notably environmental extremists, have aggressively mobilized protests, lobbying and grassroots pressure on Congress and the President to kill the project. The White House is again under intense pressure and needs to hear from supporters of U.S. energy independence and the pipeline project.

The Indiana and U.S. economies are dependent upon reliable energy. Indiana has long been a leader in the energy and transportation industries. Low cost reliable sources of energy are critical to Indiana’s large and small businesses. Virtually every manufacturing process uses petroleum products as lubricants, parts, molds or finished products.

The $7 billion proposed Keystone XL project would construct a 1,700 mile pipeline to transport about 800,000 barrels a day of heavy crude oil from tar sand fields in Canada across the central U.S. to refineries on the Gulf Coast. The project is estimated to create more than 250,000 jobs and is supported by a broad coalition of business and labor organizations.

Recently, 53 members of the U.S. Senate, including nine Democrats, signed a letter to President Obama in support of the project. “We urge you to choose jobs, economic development and American energy security . . . there is no reason to deny or further delay this long-studied project,” they wrote. Nearly 70% of American voters support building the pipeline.

The new State Department statement predicts that Canada will continue to develop the oil sands and sell to other nations whether the U.S. allows the Keystone XL pipeline or not. Canada already provides more oil to the U.S. than all Persian Gulf countries combined. A new pipeline project would strengthen and expand this already productive and vital energy relationship. Not to mention, sourcing more of our energy from a friendly, democratic and North American neighbor will help reduce our reliance on energy resources from less stable areas of the world.

Call to Action: Send a message to President Obama and your members of Congress to urge approval of the Keystone XL Pipeline!

People Speak Out on Keystone Pipeline

After four-plus years of debate and frustration, many are aware of the possibilities of the Keystone Pipeline. The administration has a second chance to approve this important project. If it listens to the people. The American Petroleum Institute reports:

The Keystone XL pipeline makes sense to the nation. Sixty-nine percent of American voters favor building the pipeline, while 83 percent believe it would strengthen our energy security and 92 percent agree jobs are important when considering the project, according to a recent Harris Interactive poll.

Strong majorities of voters in both political parties and among independents support building the pipeline, the poll also found. And the vast majority of voters polled understand the need to link up Canadian crude oil supplies with U.S. refineries and consider it important that most dollars spent on Canadian oil by America return to the U.S. when Canadians use them to buy American goods and services.

Mr. President, It’s Time to Approve Keystone Pipeline

It's Keystone Pipeline time again. The Obama administration rejected the original plan last year. A new route for the job-creating, energy-supplying pipeline has been proposed and supported this time by the Nebraska governor. Despite climate change discussion, here's why the President should not stand in the way, according to The American Conservative:

This should be a no-brainer at this point. The Obama administration’s refusal to approve the pipeline shadily cited a lack of time to review the proposal; a presidential statement last year noted that the delay was “not a judgment on the merits of the pipeline.” Well, time has passed. Environmental impact has been studied.

As the editors of the Washington Post observe:

TransCanada has reapplied with a new proposed route, and this week Nebraska Gov. Dave Heineman (R) signed off on the plan, following an analysis from the state’s Department of Environmental Quality. The regulators found that the new route would avoid the Sand Hills and other areas of concern. Though there is always some risk of spill, they said, “impacts on aquifers from a release should be localized, and Keystone would be responsible for any cleanup.” TransCanada will have to buy at least $200 million in insurance to cover any cleanup costs.

Adding to that, a letter signed by 53 senators, including nine Democrats, urged Obama to go ahead with the pipeline. “There is no reason to deny or further delay this long-studied project,” it said.

The decision to delay the pipeline reeked of election-year politics. Needless to say, the political calculus has changed. There’s a view that the rhetorical privileging of combating climate change in Obama’s second Inaugural Address will make it hard to throw environmentalists under the bus over Keystone. I think it makes it easier. Approving the pipeline offers Obama a small Nixon-to-China-like opportunity to say something like, We can safely fulfill our energy needs now while laying a foundation for a clean-energy future.

Griffin: Indiana Air Cleaner Than Decades Ago

[youtube_sc url=http://youtu.be/-UGAL01dW1g rel=0 fs=1 autohide=1 modestbranding=1]

Indiana Chamber VP of Environment & Energy Vince Griffin discusses the state of Indiana’s water and air. You may be pleasantly surprised to hear how it compares to previous generations. For more, visit www.indianachamber.com/environment.

‘Smart’ Efforts Help Restore Power

Some East Coast communities have been able to rebound from Superstorm Sandy faster than others. Part of the reason can be attributed to smart grids and smart power meters. Stephen Goldsmith writes about their impact now and in the future in Governing:

Sandy’s claiming of the title as the second most costly hurricane in U.S. history shows us the advantages and limitations of rigorous planning. The slow and arduous recovery faced by some East Coast communities has been coupled with the impressive speed with which many other communities have been able to return to business as usual. New emergency procedures put in place at the local and state levels deserve a lot of the credit. These included shutting down infrastructure and battening the hatches to protect vital resources and prepare for recovery.

Yet the storm teaches us that the best way to plan for the truly unexpected will be by being prepared to to improvise and by understanding that resilience in times of disaster isn’t determined only by a static disaster plan but to a greater degree by being dynamic and responsive to change. Being dynamic requires real-time data. Recent technologies are beginning to provide more access to more data, allowing analytics to find the patterns fast enough to make it useful during a disaster.

Smart grids, and particularly smart electric meters, played a promising role in improving disaster response and the speed with which power could be restored after Sandy passed. That role was small-scale and local, since electric utilities’ conversion to smart-grid technology has been slower and spottier than desired, but the potential is there for the technology to have a much larger impact as these systems are rolled out more widely.

At best, phone calls and spotty service-outage reports can slowly piece together a hazy picture of the conditions of a power network. But smart meters, programmed to send out a "last call of distress" when power is lost, can automatically report service cuts. This gives a utility company instant access to regional maps of outages, allowing it to prioritize repair-crew mobilization and begin getting service back to customers without them even having to report an outage.

Smart meters also can help identify the locations of particularly tricky "nested" outages, when more than one break is affecting an area. Additionally, smart meters can automatically report getting back on line when power is restored, eliminating unnecessary calls between the utility company and customers or follow-up service-crew visits. Repair crews can move on to the next repair rather than spending time checking on their last one, increasing efficiency and reducing system repair time considerably.

Pepco, the electric utility serving Washington, D.C., and nearby parts of Maryland, is crediting its partially implemented smart-meter system with helping get the power back on for its 100,000 customers affected by outages in the wake of Sandy. The store of information generated by the smart meters not only is available to the company’s repair crews to inform their response but also is aggregated into a regional map available online to give customers a better idea of system conditions.

PPL Electric Utilities’ smart meters allowed the company’s Pennsylvania customers to check on the status of their power’s return online and from the safety and comfort of remote locations, without having to trek out to potentially powerless homes or using the precious resource of repair-crew hours to do so. And while Baltimore Gas and Electric’s smart-meter system is only 10 percent complete, the utility credits the program with facilitating much faster troubleshooting and with replacing phone calls to customers to check on service–calls that often go unanswered–with a quick and reliable stream of information.

The next time a major storm hits, there will be more examples of service-restoration improvements enabled by this technology. In the face of consumer suspicions and resistance to smart meters, utilities need to publicize these success stories to build support for continued smart-grid development. The more data government and utilities can tap, the faster they can act and the more resilient a community can become.
 

Energy Investment Good News for Indiana

A southwestern Indiana company received very good news from Washington last week. Babcock & Wilcox, developing small nuclear reactors, will receive substantial funding from the U.S. Department of Energy.

Below is a portion of the DOE press release. Learn more about the company (headquartered in North Carolina but with a significant portion of its nuclear development operation in Mount Vernon, Indiana) and its product here.

As part of the Obama Administration’s all-of-the-above strategy to deploy every available source of American energy, the Energy Department today announced an award to support a new project to design, license and help commercialize small modular reactors (SMR) in the United States.  The project supported by the award will be led by Babcock & Wilcox (B&W) in partnership with the Tennessee Valley Authority and Bechtel International.  In addition, the Department announced plans to issue a follow-on solicitation open to other companies and manufacturers, focused on furthering small modular reactor efficiency, operations and design.  

“The Obama Administration continues to believe that low-carbon nuclear energy has an important role to play in America’s energy future,” said Secretary Chu.  “Restarting the nation’s nuclear industry and advancing small modular reactor technologies will help create new jobs and export opportunities for American workers and businesses, and ensure we continue to take an all-of-the-above approach to American energy production.”

This project represents a significant investment in first-of-a-kind engineering, design certification and licensing for small modular reactors in the United States. Through a five-year cost-share agreement, the Energy Department will invest up to half of the total project cost, with the project’s industry partners matching this investment by at least one-to-one.  

The Energy Department investment will help B&W obtain Nuclear Regulatory Commission licensing and achieve commercial operations by 2022 – helping to provide U.S. utilities with low carbon energy options as well as create important export opportunities for the United States and advance our nation’s competitive edge in this emerging global industry. The project will be based in Tennessee and will support additional suppliers and operations in Indiana, Maryland, North Carolina, Ohio, Pennsylvania, and Virginia.

Small modular reactors – which are approximately one-third the size of current nuclear power plants – have compact, scalable designs that are expected to offer a host of safety, construction and economic benefits. Small modular reactors can also be made in factories and transported to sites where they would be ready to “plug and play” upon arrival, reducing both capital costs and construction times. The smaller size also makes these reactors ideal for small electric grids and for locations that cannot support large reactors, offering utilities the flexibility to scale production as demand changes. 

Partnership to Fuel America Coming to Indy October 4

A request from the Partnership to Fuel America and the U.S. Chamber of Commerce (with whom we are not directly affiliated):

Matt Koch, Vice President at the U.S. Chamber’s Institute for 21st Century Energy will discuss the benefits of North American energy development to American manufacturers and the American economy at large.  Joining Mr. Koch will be Christopher Guith, Vice President for policy at the U.S. Chamber’s Institute for 21st Century Energy, who will provide a briefing on natural gas, hydraulic fracturing, and renewable fuels.  
 
WHO: 
Matt Koch, Vice President for Oil Sands and Arctic Issues at the U.S. Chamber’s Institute for 21st Century Energy.  
 
Christopher Guith, Vice President for policy at the U.S. Chamber’s Institute for 21st Century Energy.  
 
WHAT:
Partnership to Fuel America briefing and luncheon
 
WHEN:
Thursday, October 4 from 11:30 a.m. to 1 p.m.
 
WHERE: 
Bose Public Affairs Group                      
111 Monument Circle, Suite 2700 
Indianapolis, IN 46204
 
*Parking will be validated for the Chase Tower garage. Please enter on Pennsylvania Street.
 
WHY:
Affordable Energy for the Future – North America has it! We will discuss strategies and priorities.
 
RSVP:
Christina Kane at 317-684-5427 or ckane@bosepublicaffairs.com