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Coal States Score On A ‘Hail Mary’ Pass To Temporarily Block Clean Power Plan

FEB 9, 2016 @ 10:51 PM

Ken Silverstein , CONTRIBUTOR

I write about the global energy business.

Opinions expressed by Forbes Contributors are their own.

In what could be described as nothing less than a “Hail Mary” attempt to block the Obama administration’s Clean Power Plan, the coal states have scored. In a 5-4 decision, the U.S. Supreme Court agreed on Tuesday to delay the carbon reduction plan’s implementation until it can be heard in court.

If the same sports analogy is continued, however, there’s still another half to play, meaning that the lower court could uphold that regulation before it would ultimately be determined by the High Court. In fact, it is a good bet that the D.C. Court of Appeals will rule in favor of the carbon rule. But what’s not certain, however, is just what the Supremes will do when the case gets appealed to it.

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Supreme Court Deals Blow to Obama’s Efforts to Regulate Coal Emissions


WASHINGTON — In a major setback for President Obama’s climate change agenda, the Supreme Court on Tuesday temporarily blocked the administration’s effort to combat global warming by regulating emissions from coal-fired power plants.

The brief order was not the last word on the case, which is most likely to return to the Supreme Court after an appeals court considers an expedited challenge from 29 states and dozens of corporations and industry groups.

But the Supreme Court’s willingness to issue a stay while the case proceeds was an early hint that the program could face a skeptical reception from the justices.

The 5-to-4 vote, with the court’s four liberal members dissenting, was unprecedented — the Supreme Court had never before granted a request to halt a regulation before review by a federal appeals court.

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Duke Energy gets paltry fine for massive coal-ash spill

By Katie Herzog on 9 Feb 2016

2014, nearly 40,000 tons of coal ash spilled into North Carolina’s Dan River, coating the waterway with a thick, toxic sludge. The responsible party was Duke Energy, the nation’s largest power company. In a settlement last year, Duke pled guilty to federal pollution crimes and agreed to pay $102 million in fines and restitution. Today, Duke was fined another $6.6 million by North Carolina’s Department of Environmental Quality for crimes related to the spill.

“The state is holding Duke Energy accountable so that it and others understand there are consequences to breaking the law,” North Carolina Environment Secretary Donald van der Vaart said.

But are there consequences? Really?

While these latest fines might seem steep to those of us who are not huge utility companies, Duke Energy has assets of $120.7 billion. Six and a half million is loose change to Duke, a company whose CEO made $10.5 million the year after the coal-ash spill — a $2.5 million raise from the year before. And even the $102 million Duke agreed to pay the feds is hardly enough to clean up the damage the company caused. As ThinkProgress points out, a study from last year “estimated the ecological, recreational, aesthetic, and human health damages from the spill totaled $295,485,000. And that study looked at only the first six months after the spill, meaning the total damage could end up being higher.”

It’s been two years since the spill and Duke has yet to clean up its dozens of other coal-ash sites littered around the state. And if/when it does, the cost for the cleanup — and fines and restitution — may be passed on consumers, who have little choice about where they get their electricity.

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Residents fight for economic and environmental justice in one Illinois town

By Raven Rakia on 9 Feb 2016

Waukegan, Ill., a town just north of Chicago, is predominantly Latino, black, and low-income. It’s also home to a coal power plant, two active coal ash ponds, and three superfund sites. Accordingly, the community has struggled with air and water pollution for decades.

But toxic air and water aren’t its only issues — far from it: Waukegan’s residents are further afflicted by low wages and lack of health insurance. The city is a striking example of how the fight for equal economic opportunity the quest for environmental justice are inextricably tied.

On Friday, the United States Commission on Civil Rights held an environmental justice hearing in Washington, D.C. that focused specifically on coal ash and coal power plants and their prevalence in low-income communities and/or communities of color. The hearing included speakers from towns dealing with the effects of coal ash ponds in Alabama, Illinois, and South Carolina, as well as scientists and environmental justice lawyers and activists.

Community activist Dulce Ortiz, representing Waukegan, described in detail how coal infrastructure has burdened her community. According to Ortiz, the local plant has contributed to groundwater contamination, and well monitors indicate that the contamination is ongoing.

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Stung by Low Oil Prices, Companies Face a Reckoning on Debts




Oil rigs stacked for storage near Midland, Tex. The oil industry regularly undergoes booms and busts. But the downside of this cycle may prove more extreme, and messier.

Credit     Michael Stravato for The New York Times

MIDLAND, Tex. — On the 15th floor of an office tower in Midland looms a five-foot-long trophy black bear, shot by the son of an executive at Caza Oil & Gas.

But it is Caza that has recently fallen prey to a different kind of predator stalking the Texas oil patch: too much debt.

While crude prices have dropped more than 70 percent over the last 20 months, a reckoning in the nation’s vast oil industry has only just begun. Until recently, companies were able to ride out the slump using hedges to sell their oil for higher than the low market prices.

In recent months, however, most of those hedges expired, leaving a number of oil companies low on cash and unable to pay their debt. More broadly, energy executives and their lenders are realizing that a recovery in oil prices is at least a year away, too long for many companies to hold out.

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Feds approve new nuclear reactors near Houston

Posted on February 9, 2016 | By Jordan Blum

The federal government on Tuesday approved the construction of two new nuclear reactors at the South Texas Project nuclear plant southwest of Houston.

But the massive cost of the project coupled with cheap Texas power prices mean that NRG Energy and its partners have no plans to build the new nuclear reactors anytime soon, if at all.

The partnership is continuing to look for new U.S. investors to eventually move the stalled project  forward, said NRG spokesman David Knox. NRG said five years ago it wasn’t investing any more money in the expansion. Near that time, NRG estimated the project would cost about $14 billion with financing.

“Market conditions, currently dominated by low natural gas prices, make the economics of new merchant nuclear challenging,” Knox said. “However, we continue to believe that new nuclear power is important for Texas and a carbon constrained world and having this license will enable (the partners) to move quickly when market conditions support a construction decision.”

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California’s drought adds $2 billion in electricity costs

FEBRUARY 9, 2016 3:39 PM

Shortage of cheap hydro power to blame, think tank says

In this January 2014 photo, a sparse amount of snowfall surrounds the Union Valley powerhouse at the base of the Union Valley dam in El Dorado County. The drought is reducing hydroelectric supplies, which usually provide about 15 percent of the state’s total, forcing utilities to find alternative sources. Sacramento


It’s one of the lesser-known costs of California’s drought: the drying-up of the state’s normally abundant cheap hydroelectric power.

A hydro shortage has raised California’s electricity costs by a combined $2 billion the past four years, according to a report released Tuesday by the Pacific Institute, a water policy think tank based in Oakland. In addition, the institute said the drought has contributed to climate change: California’s fossil-fuel power plants have increased greenhouse gas emissions by 10 percent to make up for the hydro shortage.

The financial impact on individual consumers hasn’t been huge. SMUD, for instance, raised residential rates an average of $1.22 a month last spring to compensate for the hydro shortage. That’s amounted to a 1.3 percent increase for the typical household, said Christopher Capra, spokesman for the Sacramento Municipal Utility District.

Nonetheless, it’s clear the drought has robbed California of one of its cheapest electricity sources. Hydro typically costs 2 cents per kilowatt-hour, according to SMUD, about half the cost of power from natural gas plants. A household uses about 750 kilowatt-hours monthly.

During a normal year, hydro can account for as much as 18 percent of the state’s power supply. That figure has fallen to 10.5 percent during the drought, including a low of 7 percent last year, according to the Pacific Institute’s report.

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NRG Proved How Tough It Is to Change. So Who’s Poised to Become the Utility of the Future?


After major changes at NRG, a reflection on who’s poised to radically change the electricity business

by Katherine Tweed

February 09, 2016


Less than a year ago, NRG laid the groundwork to be the Apple or Google of energy services. But CEO David Crane left the company last December amidst investor pressure -- and Steve McBee, CEO of NRG Home, wasn’t far behind.

Eric Wesoff continues to document the exodus from the embattled power producer.

“Energy is not immune to big global forces sweeping through basically every other segment of the market,” McBee said during a recent interview with GTM. “It’s inevitable.”

With McBee gone, NRG is now grappling with how to pursue its NRG Home business.With millions of retail customers, community solar ambitions and the backing of a Fortune 250 company, the non-start of NRG Home highlights the immense challenge of quickly transitioning into a modern energy company.

Within the next decade, it is very likely that a handful of companies will emerge with customizable packages of energy management services for the modern consumer and business. Many large energy companies like NRG are potential contenders -- but the future market leader could also be a company largely unknown to the world.

Who will it be?

For the sake of argument, we’re defining the utility of the future as the entity that consumers and businesses think of as their power provider -- the company that they’ll call when the lights go out.

But the utility of the future will also have to be so much more to succeed -- leveraging data, new technologies and personalization to transform the way customers consume and deliver power.

The energy retailer

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GTM Research: 20 US States at Grid Parity for Residential Solar

But rate design and net energy metering will determine tomorrow’s solar economics.

by Mike Munsell

February 10, 2016


As installation costs continue to decline and retail electricity rates climb, residential solar economics have become increasingly attractive across the United States. According to the latest report from GTM Research, U.S. Residential Solar Economic Outlook: Grid Parity, Rate Design and Net Metering Risk, 20 U.S. states are currently at grid parity, and 42 states are expected to reach that milestone by 2020 under business-as-usual conditions.

Residential solar reaches grid parity when the levelized cost of solar energy falls below gross electricity bill savings in the first year of a solar PV system’s life. While traditional grid parity analyses rely on average retail electricity rates to calculate customer savings, GTM Research used utility and state-specific rate design, system production and installation costs to more accurately gauge solar’s attractiveness.

FIGURE: GTM Research Methodology
Source: GTM Research report U.S. Residential Solar Economic Outlook

When accounting for current net metering rules, rate design, and incentives, California, Massachusetts and Hawaii lead the nation in residential solar attractiveness; in each state, solar can reduce an average customer’s electricity bill by 20 percent to 40 percent during the first year of system life. GTM Research found that North Dakota, Oklahoma and Washington are the least attractive states for solar today.

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Obama proposes new approaches to Western water shortages

By Carolyn Lochhead

February 9, 2016 Updated: February 9, 2016 7:53pm

WASHINGTON — Spurning dams for research in water technology, President Obama laid out a striking contrast Tuesday to the strategies adopted by California lawmakers in both parties on how to remedy Western water shortages.

In a final budget plan that was dead even before its arrival on Capitol Hill, the administration’s vision of investing $269 million in research on water desalination, recycling and efficiency will find little traction in the Republican-controlled Congress. But it does lay out an alternative to the dams, water tunnels and other giant building projects that Gov. Jerry Brown, Democratic Sens. Dianne Feinstein and Barbara Boxer, and Central Valley House Republicans have embraced to varying degrees.

Building on the model the administration used to boost solar and wind power early in Obama’s presidency, the budget calls for “an aggressive two-part water innovation strategy.” The first step would be to wring more water out of the existing system by increasing efficiency, reuse and conservation. The second is to invest in research to reduce the cost of desalination and recycling until they reach “pipe parity” with water drawn from rivers.

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Supreme Court’s Blow to Emissions Efforts May Imperil Paris Climate Accord




A coal-fired power plant behind homes in Poca, W.V., in 2014.


Robert Galbraith/Reuters

WASHINGTON — The Supreme Court’s surprise decision Tuesday to halt President Obama’s climate change regulation could weaken or even imperil the international global warming accord reached with great ceremony in Paris less than two months ago, climate diplomats said.

The Paris Agreement, the first accord to commit every country to combating climate change, had as a cornerstone Mr. Obama’s assurance that the United States would carry out strong, legally sound policies to significantly cut carbon emissions. Over history, the United States is the largest greenhouse gas polluter, although its annual emissions have been overtaken by China’s.

But in the capitals of India and China, two of the world’s largest polluters, climate change policy experts said the Supreme Court decision threw the American commitment into question, and possibly New Delhi’s and Beijing’s, too.

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U.N. Agency Proposes Limits on Airlines’ Carbon Emissions


After more than six years of negotiations, the global aviation industry agreed on Monday to the first binding limits on carbon dioxide emissions, tackling the fastest-growing source of greenhouse gas pollution.

The deal is the latest in a series of international efforts to address climate change. Until now, airplanes had not been included in any international climate change deals, like the recent Paris Agreement, or the Montreal Protocol, expected to be completed later this year.

The proposed new rules, announced in Montreal by the International Civil Aviation Organization, the United Nations’ aviation agency, would apply for all new airplanes delivered after 2028.

Airlines account for about 2 percent of global emissions — about the same as Germany. But many analysts think the emissions could triple by the middle of the century given the expected growth in air travel over the next decades.

    It took little time, though, for the announcement to set off a debate over how effective the proposed rules would be.

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    Chesapeake Energy Plagued by Plunging Shares

    By MICHAEL J. de la MERCEDFEB. 8, 2016



    A Chesapeake Energy drill site in Dimmit, Tex.


    Tamir Kalifa for The Texas Tribune

    The pain for Chesapeake Energy began early on Monday, as its stock began to tumble. And kept falling.

    Shares of the beleaguered oil producer fell to as low as $1.51, with the tumble causing several trading halts, after the trade publication Debtwire reported that the company had hired restructuring lawyers at Kirkland & Ellis.

    The worry among investors was that Chesapeake was considering filing for Chapter 11 bankruptcy protection, as the low price of oil continues to weigh on the energy industry.

    The company’s shares have fallen 56 percent so far this year.

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    Chief of Pemex, Mexican Energy Giant, Steps Aside


    MEXICO CITY — The chief executive of Mexico’s state-owned oil company Pemex, Emilio Lozoya Austin, stepped down on Monday, a casualty of the energy giant’s struggle with collapsing oil prices and declining production.

    In his place, Mexico’s president, Enrique Peña Nieto, appointed José Antonio González Anaya, a Harvard-educated economist with a long career in Mexico’s finance ministry. Mr. González Anaya has spent the last three years as the head of Mexico’s sprawling social security institute, the country’s main public health system.

    Concern over Pemex’s finances has risen over the past week. Last week, the president of the central bank, Agustín Carstens, issued a sharp warning that planned spending cuts at Pemex could not be postponed.

    Mr. Lozoya, who was appointed to lead Pemex at the start of President Peña Nieto’s term three years ago, was seen as a capable turnaround specialist from the private sector who could wring efficiencies from the company.

      His chief task was preparing Pemex for stiffer competition as the government began to open Mexico’s closed oil sector to the private sector in an effort to reverse the decline in output. Pemex crude production has fallen by more than a million barrels a day since its peak in 2004.

      But special interests at the company, like its unions and its private contractors, hampered those efforts.

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      Half-Built Nuclear Fuel Plant in South Carolina Faces Test on Its Future

      By JAMES RISENFEB. 8, 2016


      The Department of Energy wants to abandon the Mixed Oxide Fuel Fabrication Facility near Aiken, S.C.

      Credit High Flyer/SRS Watch

      WASHINGTON — Time may finally be running out on the Mixed Oxide Fuel Fabrication Facility, a multibillion-dollar, over-budget federal project that has been hard to kill.

      The Energy Department has already spent about $4.5 billion on the half-built plant near Aiken, S.C., designed to make commercial reactor fuel out of plutonium from nuclear bombs. New estimates place the ultimate cost of the facility at between $9.4 billion and $21 billion, and the outlay for the overall program, including related costs, could go as high as $30 billion.

      Officials warn that the delays in the so-called MOX program are so bad that the plant may not be ready to turn the first warhead into fuel until 2040.

      So in the budget that the Obama administration will present on Tuesday, the Energy Department proposes abandoning it. Energy officials want to spend only the money necessary to wind down the MOX program while the government shifts to a different method of disposing of the plutonium.

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