Politico Guest Editorial: Reduce out-of-control spending; Rep. Upton calls for freeze to weatherization, EnergyStar

Posted by Laura Arnold  /   November 15, 2010  /   Posted in Federal energy legislation, Uncategorized  /   No Comments
ENERGY POLICY:Upton calls for freeze to weatherization, EnergyStar (11/15/2010)Katherine Ling, E&E reporter

The leading candidate to become chairman of the House Energy and Commerce Committee today boosted his conservative credentials, laying out a plan to cut federal government spending levels including freezing programs that support energy efficiency retrofits in homes and efficiency labeling for appliances.

Rep. Fred Upton (R-Mich.) wants to seize unspent stimulus funds and change committee rules to require all committee legislation be offset by cuts to programs within the committee's jurisdiction, he wrote today in an opinion editorial in Politico. Grover Norquist, president of the conservative group Americans for Tax Reform, co-authored the piece.

Upton also wants to go "line by line" through the budget to identify potential cuts, according to the op-ed. The piece singles out the Energy Department's weatherization program -- which provides funding to states to help low-income families reduce their energy bills by making their homes more energy efficient -- and DOE and U.S. EPA's energy efficiency labeling program "EnergyStar" as two programs that need to be re-examined or cut.

"From fraud in the EnergyStar program to ridiculous delays in the implementation of the $5-billion stimulus weatherization program, programs not working as intended must be frozen until we can determine how to fix them," Upton wrote. "Or whether they should simply be discontinued and return the taxpayers their money."

DOE has recently cracked down on several EnergyStar-labeled products, including lamps, air conditioners and freezers, that have failed to meet EnergyStar efficiency levels in audits. DOE issued the first consent decree and a fine of $150,000 to Haier America last January for EnergyStar violations on some of its freezers (E&ENews PM, Jan. 7).

The weatherization program has come under scrutiny this year after Congress provided $5 billion in the stimulus for the program but DOE encountered serious delays in getting the money to actual projects in states because of federal requirements regarding wages, "Buy America," and historic preservation (E&ENews PM, Feb. 23). The Illinois weatherization program has also specifically been criticized by DOE's inspector general for "substandard" workmanship, inflated material costs and inadequate inspections (Greenwire, Oct. 19).

As of August the program had weatherized 341,326 homes compared to 30,297 homes near the beginning of the year, according to a DOE report. DOE expects to retrofit 586,015 homes by the end of 2011.

Upton is the ranking member of the Energy and Environment Subcommittee on the Energy and Commerce Committee and is seeking to be chairman of the committee when the House reconvenes next session under a Republican majority. Reps. Cliff Stearns (R-Fla.) and John Shimkus (R-Ill.) are also seeking the chairmanship. Rep. Joe Barton (R-Texas) is currently ranking member of the full committee but is term-limited under GOP rules, although he is seeking a waiver so he can take the top spot in the new Congress (Greenwire, Nov. 11).

Upton is considered the most politically moderate of the quartet, so his decision to pen a piece with Norquist has political significance. Conservative GOPers have voiced concern about Upton's "moderate" record, and Barton has highlighted it in public statements, which he compares to his "consistent conservative commitment" (E&ENews PM, Nov. 10).

Upton said in the piece that the committee can no longer afford to "pass the buck to the appropriators." He called for all offsets to be made from spending programs, not "tax increases," and for cuts to be 10 percent higher than the projected costs for the legislation.

"If we cut 10 percent more than is necessary, we could have an added safeguard," Upton wrote. "And if the [Congressional Budget Office] estimate is accurate, the result will be a reduction in federal spending. It is a win-win situation that is likely to have immediate results."

Reduce out-of-control spending now
By: Grover G. Norquist and Rep. Fred Upton
November 15, 2010 04:31 AM EST
The federal budget deficits reported in 2009 and 2010 were the highest on record since 1945, according to the non-partisan Congressional Budget Office, approximately $1.4 trillion and $1.3 trillion, respectively. (That’s trillion with a capital T.) Under the Democrats’ one-party reign the last two years, the size of government has exploded and the United States has added an unprecedented $2.7 trillion to the national debt, amounting to nearly $5 billion dollars a day.Meanwhile, again according to the CBO, federal spending has grown from 20.1 percent of gross domestic product in 2006 (the year before Nancy Pelosi became speaker, and slightly below the historical average), to 23.8 percent of GDP (a record but for 2009's all-time high) on Election Day 2010. Washington clearly has a spending problem — not a tax revenue problem.The American people are fed up and demand that we tackle government spending and the federal budget deficit immediately. The days of the administration printing more money as a solution to meet budget shortfalls are now over.While it is true that the Energy and Commerce Committee is not ground zero for budget work, every committee must play an integral role in cutting spending and reining in the dramatic expanse of government. A first step for every committee must be to repeal the billions of dollars of unspent stimulus funds in their jurisdiction.

We must also stop letting legislation move through the committee process with the opaque, anything goes “such sums as may be necessary” appropriations language. Even when legislators have a specific spending figure in mind, they routinely use this smoke-and-mirrors tactic to get bills through the committee process and evade a difficult debate on spending.

Drafting legislation in such a consequence-free environment allows committees to pass the buck to the appropriators. But we cannot afford to pass the buck on our futures any longer.

It is time we immediately assumed responsibility for our out-of-control spending crisis before the hole gets any deeper and future generations are in greater peril. Under a new House Republican majority, we must swiftly change committee rules to ban this grossly irresponsible practice.

 

To immediately cut spending and the size and scope of government, we must also require that any committee legislation scored by CBO have a net cost to taxpayers directly offset by cuts to programs within that committee’s jurisdiction. Moreover, we must not tolerate any “offsets” from tax increases. 

In the next Congress, at least 235 members will have signed the Taxpayer Protection Pledge. Tax hikes are off the table -- forcing us all to focus on the actual problem: spending.

By changing committee rules for Energy and Commerce, as well as others, we must also require that legislation go one step further, and cut 10 percent more than the projected costs -- to ensure that any new program will actually be covered.

This means that a $1-million program would need a $1.1 million offset. If we cut 10 percent more than is necessary, we could have an added safeguard. And if the CBO estimate is accurate, the result will be a reduction in federal spending. It is a win-win situation that is likely to have immediate results.

Vigorous oversight is also an absolute necessity in the next Congress. Committees must hold budget hearings for every agency within their jurisdiction, and then, as candidate Obama promised, go line-by-line through each budget to identify potential items to cut. A chainsaw would be the recommended tool of choice.

Oversight will also help expose additional government waste. As Supreme Court Justice Louis Brandeis said, “Sunshine is the best disinfectant.”

From fraud in the EnergyStar program to ridiculous delays in the implementation of the $5-billion stimulus weatherization program, programs not working as intended must be frozen until we can determine how to fix them. Or whether they should simply be discontinued and return the taxpayers their money.

The American people have spoken, and it is the responsibility of the newly elected Republican majority to chart a new course of limited government and less spending. That begins at the committee process -- and the deficit must be in the crosshairs.

Grover Norquist is the president of Americans for Tax Reform. Fred Upton (R-Mich.) is the ranking member of the Energy and Commerce Subcommittee on Energy and the Environment.

© 2010 Capitol News Company, LLC

BIOFUELS: Lawmakers press for new policy in lame duck

Posted by Laura Arnold  /   November 14, 2010  /   Posted in Biofuels, Federal energy legislation  /   No Comments

 

11/10/2010

Allison Winter, E&E reporter

A group of Midwestern senators is pressing Senate leaders to include a broad new federal support system for biofuels in an energy bill that could come up for a vote as soon as next week.

Sens. Tom Harkin (D-Iowa), Christopher Bond (R-Mo.), Amy Klobuchar (D-Minn.) and Tim Johnson (D-S.D.) want Senate Majority Leader Harry Reid (D-Nev.) to extend a controversial ethanol tax credit and advance provisions aimed at expanding biofuels markets.

Their request, sent to Reid yesterday, indicates that a fairly narrow natural gas bill -- up for consideration in next week's lame-duck congressional session -- could become a target for a number of other proposals lawmakers want to eke out before Democrats lose numbers in the House and Senate next year. The natural gas bill is scheduled for a cloture vote next Wednesday.

Saying they are "deeply concerned" that marketplace limitations are constraining the growth of the biofuels industry, the senators vowed to work for bipartisan support of the bill if it contains provisions to help biofuels. They are pushing for "market expansion provisions," like federal support for flex-fuel vehicles or fuel pumps that could offer options for higher blends of ethanol.

"Quite simply, we need more vehicles that can utilize high percentages of ethanol and other biofuels, we need to develop pipelines to transport these fuels from their production sites to the largest markets, and we need to ensure that these high renewable content fuels are available at filling stations across the country," a letter from the senators says.

The lawmakers are also pushing for an extension of a controversial ethanol tax credit that would otherwise expire at the end of the year. The letter says the volumetric ethanol excise tax credit "deserves review" over the long term but asks for its continuation until other biofuels support systems are in place.

The senators estimate the policies could lead to a fivefold increase in ethanol's displacement of oil over the next 20 years.

Their efforts come at a critical time for federal ethanol support programs. The current ethanol credits are on the verge of expiring, and Congress has thus far been unable to extend a less costly and less controversial biodiesel tax credit that already expired last year.

Richmond Power and Light to Consider So-called “Net Metering” Ordinance Nov. 15th

Posted by Laura Arnold  /   November 13, 2010  /   Posted in Uncategorized  /   2 Comments

Editor's note: The Richmond newspaper Palladium-Item reported earlier this week that Richmond Power and Light (RP&L) is considering adopting a so-called net metering ordinance on Monday, Nov. 15th. Sorry but what I've read so far in the Palladium-Item this is not real net metering but what I call "net billing".  The newspaper article below unfortunately confuses or misdefines this RP&L proposal as allowing customers to sell excess electricity back into the grid. That also is not net metering. Net metering is normally defined as a credit on the customer's electric bill for any net excess generation (NEG). 

IDEA's definition of net metering is a billing arrangement between a utility company and a customer - with a gridtied, renewable energy system - where one (1) kilowatt hour generated by the customer has the same value as one (1) kilowatt hour consumed by the customer.

It is important to make this distinction because there are electric utilities in Indiana such as Indianapolis Power and Light (IPL) that now offers a feed-in tariff under Rate REP in which they will actually purchase power from selected renewable energy producers. Northern Indiana Public Service Commission (NIPSCO)  has a similar feed-in tariff proposal pending before the Indiana Utility Regulatory Commission (IURC) called Experimental Rate 849.

This is also different than selling electricity back into the grid under the Public Utilities Regulatory Act (PURPA) of 1978 at the utility's "avoided cost".

Your thoughts and comments please.

Original Article: http://www.pal-item.com/article/20101108/NEWS01/11080320

Utility considers allowing customers with wind, solar power or generators to sell power back

By Pam Tharp • Correspondent • November 8, 2010

Richmond Power & Light customers who also generate their own power might soon be able to sell extra kilowatts to RP&L.

Customers with wind or solar power systems or generators could sell their excess power back to the electrical grid if RP&L adopts a net metering ordinance, RP&L general manager Steve Saum said. The RP&L board will review a proposed ordinance for net metering at its Nov. 15 meeting.

The amount of electricity a customer could sell to the grid is limited to 10 kilowatts at any one time. Customers with higher generation capacity would need an agreement with the Indiana Municipal Power Agency, Saum said.

RP&L charges its customers 7.5 to 8 cents per kilowatt hour. Customers with extra power to sell would be paid at half of that rate, about 4.5 cents, because the higher rate includes the utility's fixed costs for line maintenance and overhead, Saum said. -MORE-

Duke fires Indiana president, ex-regulator in fallout from ethics scandal

Posted by Laura Arnold  /   November 09, 2010  /   Posted in Edwardsport IGCC Plant, Uncategorized  /   No Comments
 
Editor's Note: This action reported in today's Indianapolis Star confirms the rumor circulating that Michael Reed and Scott Storms were not coming back from their administrative leave at Duke Energy.
 
Written by John Russell
 
Duke Energy Corp. has fired its Indiana president and a staff attorney in the wake of an ethics scandal that has cast a shadow over the company's operations in the state, particularly construction of its controversial $2.9 billion power plant in Southern Indiana.

The electric utility told employees in an internal newsletter Monday that it had terminated the employment of Michael Reed, president of its Indiana operations, and Scott Storms, a lawyer in its regulatory affairs office. Both had worked in the company's Plainfield office.

The utility had been stung in recent months by disclosures that Storms, while still an administrative law judge with the Indiana Utility Regulatory Commission, had presided over numerous cases this year involving Duke, even as he was talking to Reed about a job at the electric company.

At the same time, Storms had signed administrative orders that helped clear the way for Duke to pass on to customers the cost overruns for its coal gasification plant in Edwardsport.

Storms and Reed had received clearance from the Indiana State Ethics Commission to leave state government and begin working immediately for Duke. But the panel later decided to take another look at Storms' case.

The ethics commission recently found probable cause that Storms had had a financial interest arising from employment or prospective employment at Duke and failed to notify his superiors of a potential conflict of interest. The panel is set to consider the matter Wednesday.

The ethics commission's initial clearance of Storms' move to Duke raised cries of foul from watchdog groups, which said the situation was a clear conflict of interest and a violation of the state ethics code.

Duke did not provide details Monday onthe terminations but said it took action "after careful consideration" of the findings of an investigation conducted by an outside law firm, Gibson, Dunn & Crutcher, which the company said it received Thursday. The company did not share the law firm's report with employees or the media.

"Because the report involves personnel matters, we won't be sharing it," Duke spokeswoman Angeline Protogere said. She added that the company's investigation is continuing. Duke also disclosed some of the personnel changes in a filing Monday afternoon with the Securities and Exchange Commission.

Neither Reed nor Storms could be reached for comment Monday. The two officials had been on administrative leave since Oct. 5, pending the outcome of the company investigation.

Adam Arceneaux, an attorney at Ice Miller who had represented Reed in June before the Indiana State Ethics Commission, sounded surprised by the news.

"You're the first person to tell me about this," he said. "I have no comment at all. I really don't."

Citizens Action Coalition of Indiana, which made Duke's hiring of Storms public in September, on Monday called for Duke to release the full contents of its report that led to the firings.

"The public deserves to know all the facts in this case," said Kerwin Olson, project director for the consumer watchdog group.

Another watchdog group, Common Cause/Indiana, renewed its call Monday for an outside, federal investigation into the matter.

"It looks like Duke wants to wash their hands of Reed and Storms, and given the stain they've left, it was the appropriate thing for them to do," said Julia Vaughn, policy director with the group. "But we still think there could be more to it and think an outside investigation is needed."

U.S. Attorney Joe Hogsett has referred calls for a federal investigation to the U.S. Justice Department but declined to comment further.

Concerns about a revolving door between the state regulatory agency and the utilities it oversees reached a climax in September. That's when Gov. Mitch Daniels fired the chairman of the IURC, David Lott Hardy, saying Hardy had been aware of the job conversations between Storms and Reed but did not remove Storms from presiding over Duke cases. Daniels also asked the state inspector general's office to investigate the matter for any possible violations of state law.

E-mails later obtained by The Indianapolis Star showed Reed and Storms apparently had been talking as early as June about a job for Storms at Duke.

"I'm still working on the 'you' issue with Duke mgt," Reed told Storms in a June 27 e-mail. "Don't sense a concern about
making this happen, rather more of an issue of when and how."

A month after that e-mail exchange, Storms signed off on a lengthy administrative order that could result in the
IURC approving cost overruns for Duke's Edwardsport plant.

In recent weeks, the IURC has begun reviewing all cases involving the Edwardsport plant back to 2006, along with other Duke matters back to January 2010.

Through a spokeswoman, IURC Chairman Jim Atterholt declined to comment Monday on Duke's action. Jane Jankowski, press secretary to Daniels, also declined to comment. "It's a Duke investigation," she said.

Last week, Duke CEO Jim Rogers was called to appear before the IURC to answer questions about the company's relationship with state regulators and to defend the plant.

He told the IURC he was confident there had been no improper communication between Duke employees and the IURC regarding the Edwardsport plant. He also said the company was investigating the e-mail matter and would take decisive action at the appropriate time.

Duke has spent about $2 billion so far on the Edwardsport plant, which is designed to serve hundreds of thousands of
households and will replace several older coal plants that Duke is planning to retire. Construction on the new plant is about half-completed.

On Monday, Duke, based in Charlotte, N.C., named Doug Esamann to succeed Reed as head of its Indiana operations. Esamann began serving as interim president Oct. 11.

Duke also said it is implementing "specific guidelines" related to hiring for certain job openings. The new guidelines specify that any job candidate linked to a regulatory or oversight group is to be removed from any matter concerning the company before being considered for the jobs.

----------------------------------------------------------------------------------------

Michael W. Reed

» Age: 59.

» Position: Former president, Duke Energy Indiana. Started job in June.

» Previous: Commissioner, Indiana Department of Transportation, February 2009 to June; executive director, Indiana Utility Regulatory Commission, 2006-09; previously held various positions at GTE/Verizon.

» Annual salary at IURC: $98,996.

» Education: Bachelor's, business, Indiana University; master's, finance and management, Ball State University.

Scott R. Storms

» Age: 50.

» Position: Previously was general counsel and chief legal adviser to the IURC. He left in September to work as a lawyer in Duke Energy's regulatory division.

» Career: Joined the IURC in June 2000. He also served as the commission's chief administrative law judge. He previously served as enforcement section chief in the office of legal counsel at the Indiana Department of Environmental Management.

» Annual salary at IURC: $93,375.

» Education: Indiana University School of Law-Indianapolis.

Sources: IURC, Duke Energy, Indiana State Personnel Department

WIND FARM PROXIMITY AND PROPERTY VALUES IN CENTRAL ILLINOIS

Posted by Laura Arnold  /   November 06, 2010  /   Posted in Uncategorized  /   5 Comments
 

    

by Jennifer L. Hinman, Illinois State University, May 2010

Executive Summary

 

The objectives of this study are to examine whether proximity to the 240-turbine, Twin Groves wind farm (Phases I and II) in eastern McLean County, Illinois, has impacted nearby residential property values and whether any impact on nearby property values changes over the different stages of wind farm development. This study uses 3,851 residential property transactions from January 1, 2001 through December 1, 2009 from McLean and Ford Counties, Illinois. This is the first wind farm proximity and property value study to adopt pooled hedonic regression analysis with difference-in-differences estimators. This methodology significantly improves upon many of the previous methodologies found in the wind farm proximity and property value literature.

The estimation results provide evidence that a "location effect" exists such that before the wind farm was even approved, properties located near the eventual wind farm area were devalued in comparison to other areas. Additionally, the results show that property value impacts vary based on the different stages of wind farm development. These stages of wind farm development roughly correspond to the different levels of risk as perceived by local residents and potential homebuyers. Some of the estimation results support the existence of "wind farm anticipation stigma theory," meaning that property values may have diminished in "anticipation" of the wind farm after the wind farm project was approved by the McLean County Board. Wind farm anticipation stigma is likely due to the impact associated with a fear of the unknown, a general uncertainty surrounding a proposed wind farm project regarding the aesthetic impacts on the landscape, the actual noise impacts from the wind turbines, and just how disruptive the wind farm will be. However, during the operational stage of the wind farm project, as surrounding property owners living close to the wind turbines acquired additional information on the aesthetic impacts on the landscape and actual noise impacts of the wind turbines to see if any of their concerns materialized, property values rebounded and soared higher in real terms than they were prior to wind farm approval. Thus, this study presents evidence that demonstrates close proximity to an operating wind farm does not necessarily negatively influence property values or property value appreciation rates. The estimation results strongly reject the existence of "wind farm area stigma theory" for the area surrounding Twin Groves I and II.

 

Download the report HERE:  2010 Wind Farm Proximity and Property Values[1]

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