Want to invest in, operate or build a power plant? Whatever you want to do, you can be sure that opponents are doing their best to shut it down, tax it more heavily or stop it from opening. We’ve seen some of these national disputes surface right here in River City — and another quarrelsome chapter is on its way.
During the mid-2000s, it became clear to many electric utilities that coal-fired power plants had no long-term future. Coal was (and is) a cheap and abundant fuel, but one with a lot of built-in undesirables.
Environmentalists, renewables advocates and clean air activists had butted heads with coal producers and users for years without much effect, but the tide turned. Public concerns about climate change and air pollution affected state and federal policies. Unfunded state mandates required that power producers derive increasing percentages of their output from renewables, while federal regulators forced operators to retrofit aging coal burners with sophisticated pollution control systems.
The “War on Coal” devolved into scores of local battles, as utilities large and small decided what to do about the new regulatory environment. Massive generators like Xcel shut down older coal-fired plants, installed wind and solar and/or added natural gas capacity. Colorado Springs Utilities bought out its private partner in the Front Range combined cycle gas-fired plant, added solar and wind capacity and upgraded pollution control systems on the Drake and Nixon plants. By placing multiple bets, CSU hoped to minimize its market and rate risks.
But like the FARC in Colombia, our coal warriors aren’t about to lay down their arms. On Monday, three El Paso County residents filed an appeal in the U.S. Court of Appeals for the District of Columbia against the U.S. Environmental Protection Agency over EPA’s “failure to properly protect residents from harmful sulfur dioxide” emitted by the Drake downtown power plant.
“Sometimes,” a mid-level EPA administrator told Jacqui Ostrom, one of the appellants, “it takes a lawsuit to get our attention, there’s so much on our plate.”
The war goes on, but meanwhile one of our most prominent residents is in the middle of another energy spat: the War on Wind.
Phil Anschutz’s Power Company of Wyoming has been planning and permitting the most ambitious wind project in North America for more than 10 years. The Chokecherry/Sierra Madre Project will have 1,000 turbines with a capacity of 3,000 megawatts, selling its production into the California, Nevada and Arizona markets. After years of regulatory delays, Anschutz is ready to start building — but here comes the taxman!
Wyoming has suffered in the coal wars, seeing federal coal lease revenues decline by $300 million annually from anticipated levels. Mineral severance taxes have propped up the state budget for decades, allowing the state to do without an income tax. Under the doubtful theory that wind, like coal or crude oil, is an exhaustible natural resource, Wyoming imposes a wind production tax of $1 per megawatt-hour. In preliminary planning for the 2017 budget, the Wyoming legislature is kicking around the idea of doubling, tripling or quadrupling the tax.
Anschutz’s company is fighting back, warning the feckless legislators that such an increase could doom the project. Those tax lovin’ Wyoming Republicans (now that’s a phrase I never expected to write!) may soon come to their senses, since the project offers huge benefits to the state.
“Over the construction period and the following 20 years,” Laura Hancock wrote last week in the Casper Star-Tribune, “the project is expected to provide $780.5 million in property, wind energy and sales and use taxes to Carbon County and the state.”
Meanwhile, the domestic nuclear energy business suffered yet another long anticipated setback, as The New York Times reported on Sept. 11.
“After spending more than 40 years and $5 billion on an unfinished nuclear power plant in northeastern Alabama,” the Times noted, “the Tennessee Valley Authority is preparing to sell the property at a fraction of its cost.”
The authority “has set a minimum bid of $36.4 million for its Bellefonte Nuclear Plant and 1,600 surrounding acres of waterfront property on the Tennessee River. The deal includes two unfinished nuclear reactors, transmission lines, office and warehouse buildings, eight miles of roads and a 1,000-space parking lot.”
Such a deal! I guess you could call it war surplus — leftover debris from the meltdown of the nuclear power industry.
The takeaway, to paraphrase Willie Nelson: “Momma, don’t let your babies grow up to build power plants.”