Shortly after that that I wrote another piece which described the layers of problems facing the folks in rural areas, and specifically the Upper peninsula with the failure to support our coal burning electrical platform. However, the meat of the piece better describes the way in which natural gas providers have also played a a part in defeating coal.
Coming amidst an impending decision by the EPA on the Utility MACT (maximum achievable control technology) rule that is expected to lead to job loses, plant shutdowns, and rolling blackouts across the country, this strange partnership raises a question. What does Chesapeake stand to gain, by pouring money into a seemingly disparate organization with extremely different objectives and priorities? Politico writes:
The ads come as the coal industry is at war with the Obama administration over new rules to curb pollution from coal-fired power plants. The EPA is expected to issue new rules on Friday to curb air toxics from power plants, which are estimated to cost industry about $10.9 billion each year.Stricter rules for power plants are expected to offer a competitive advantage to the cleaner-burning natural gas industry.
Oh, so its an end-justifies-the-means kind of thing. Rent seeking. But when questioned, Chesapeake officials have stated that the flood of cash to ALA is merely business as usual for the company, which donates to “a wide variety and number of health and medical-related organizations. Well that’s very responsible of them, bravo for being so charitable.
So how should average middle class Michiganders engage in this electricity debate? What should they demand in the 2015 legislation on electricity? Can they prevent the titans from looting their family budgets?
First and foremost, Michiganders should demand an end to hybrid deregulation. All electricity consumers should be under the same regulatory scheme, with equal options to escape. No favoritism. This aligns the interests of politically potent, large electricity consumers with those of the average Michigander. This creates an effective counterbalance to the political power of the utilities; political power purchased with your electricity payments. Even full regulation is preferable to our current hybrid deregulation scheme.
Michiganders should further demand full deregulation of our electricity market. As regulated entities, utilities have a ‘cost plus’ mindset which relentlessly drives prices higher. Regulatory bodies limit themselves to dampening this drive for higher prices, but do not drive efficiencies which would genuinely control energy costs. Competition-driven efficiencies are very important to Michigan’s economy, which still has a significant, energy-intensive industrial base. Also Michigan’s utilities have not demonstrated any special competence operating their electrical power stations, so competition in the supply of electricity will promote best practices there and lower costs as well. Ultimately, a deregulated grid properly managed is more tolerant of supply shocks because more actors will be supplying the electricity.
The RPS should not be renewed at any level. Renewables should not be forcibly subsidized by any ratepayers, overtly or covertly. The current PA 295 regulatory scheme has residential electricity consumers subsidizing renewables through skyrocketing rates, while large consumers escape this burden. As renewable energy sources become cost effective, they will be welcomed by all parties.
If environmental wackos want their own electricity to come from RPS renewables, let them pay the full cost including base load backup costs. Most renewable sources are intermittent and require expensive base load backup capacity for periods where they cannot generate electricity. The Midwest Independent Transmission System Operator (MISO) historical record shows that Michigan wind power, by far the most significant current RPS component (883 turbines, about 58% of RPS power), was only available 31.5% of the time (termed ‘capacity factor’) during 2011 and 2012. During two months, July and August of 2011, wind was available only available 16% of the time. Most evaluations of the cost effectiveness of wind and solar generation pointedly neglect the costs of base load backup capacity to keep the lights on. Essentially, wind power capacity has to be backed up by 100% of its rated capacity with fossil-fueled base load capacity to prevent blackouts during zero wind periods, so why bother install wind power (or solar, for that matter) in the first place? Ratepayers subjected to RPS get to pay the capital costs for twice the generating capacity they actually need.
How should the press release by Michigan Attorney General Bill Schuette be taken?
One would think that a member of the party supporting ‘free and open markets’ would be inclined to liberate those same markets.
Yet recently and not for the first time, the Michigan Attorney General’s office has investigated, and prosecuted privately-held businesses for responding to demand and availability in ways they felt were necessary. Using taxpayer dollars, the AG’s office obtained a $500,000 settlement from a provider of propane, because that business raised its prices.
Though some of the investigation had legitimate reason to happen (established deals were not being honored), the underlying premise that the AG’s office presents is one that seemingly panders to the “its just not fair” crowd. When Schuette says :
“I’m happy we can put money back into the wallets of hard-working families who paid steep prices to heat their homes last winter while already trying to make ends meet.”
He is not saying he is “happy to provide enforcement of contract”
THAT is a problem. Its not the job of the Michigan Attorney General to make sure pricing is fair. Its not the Job of the Office of the Attorney General to ensure people can afford their utilities or everyday needs. Its definitely not Bill Schuette’s job to “put money back into the wallets” of those he deems to have been victimized by a brutally cold winter, or those who must provide the resources to deal with it.
Attorney General Bill Schuette today announced his Corporate Oversight Division has secured more than $500,000 for approximately 5,600 Michigan propane consumers to resolve customer complaints against AmeriGas concerning propane-pricing issues during last winter’s heating season. This settlement marks a key development in his ongoing investigation into hundreds of consumer complaints related to propane pricing and delivery during the 2013-2014 winter season.
“Cooler autumn weather means many Michigan families are already anxious about upcoming heating bills,” Schuette observed. “I’m happy we can put money back into the wallets of hard-working families who paid steep prices to heat their homes last winter while already trying to make ends meet.”