Joseph Krist
Publisher
PUBLIC POWER AND SAN DIEGO
The Public Power Feasibility Study was commissioned by the City of San Diego. the preliminary and high-level results indicate that the City may have an opportunity to generate financial benefit, depending on the purchase price and the timeframe to realize such a result. If the City were to acquire the SDG&E electric delivery assets for approximately $2 billion, the cumulative benefit of the MEU to ratepayers might be as much as approximately $3 billion within a 10-year time frame.
This represents potential annual savings to ratepayers of approximately 13% to 14% in comparison to continued operations under SDG&E. However, if the City were to acquire the SDG&E assets for approximately $6 billion, the cumulative benefit over the 10-year period might result in a cost (or dissaving) of approximately $60 million.
There are currently two large municipalization efforts underway in California. These are the City and County of San Francisco (CCSF), and the South San Joaquin Irrigation District (SSJID or District). The state of these efforts highlights the difficulty of the process of municipalization. In 2019, the CCSF made an offer to purchase Pacific Gas & Electric (PG&E) assets for a price of $2.5 billion, which was rejected by PG&E.
In 2021, CCSF continued its attempts to municipalize by petitioning for an independent state valuation of PG&E’s local electric assets which is currently under consideration by the California Public Utilities Commission. CCSF filed its Opening Testimony on April 10, 2023. PG&E’s Opening Testimony is due October 13, 2023, with CCSF Rebuttal due on January 8, 2024. Discovery continues in the case.
The second example is the more contentious of the two. After continued litigation and favorable court decisions for SSJID, the District made an offer to purchase local PG&E assets in 2016. After PG&E indicated that their assets were not for sale, the District filed in the San Joaquin Superior Court to begin eminent domain proceedings to acquire the assets. In 2018, the San Joaquin Superior Court dismissed SSJID’s eminent domain claim, which was then appealed by SSJID to the State of California Appellate Court and conjoined with the continuing litigation regarding the San Joaquin Local Agency Formation Commission (SJLAFCo) approval. In 2021, the Appellate Court ruled in favor of SSJID which PG&E appealed to the California Supreme Court. The Supreme Court denied PG&E’s petition for review in 2022 and the Appellate Court has subsequently returned the case to the Superior Court to begin the condemnation process.
NUCLEAR
Fourteen years and $35 billion later, Unit 3 at Plant Votgle in Georgia has finally gone into commercial service. Unit 3 enters service seven years behind schedule and Unit 4 is more than six years late. The new Vogtle units both use a large, advanced reactor design developed by Westinghouse called the AP1000. The Vogtle reactors are the first built on the platform in the U.S. The question is whether any more such reactors will be built given the difficulties with construction at Votgle.
For proponents of large scale nuclear generators, the operation is seen as confirming the decision to go big. Many of the comments made by supporters ignore the reality of the costs associated with traditional nuclear. Those costs and the incredible number of delays and cost increases have instead driven the industry to look to small scale modular reactors as the future of the industry. The efforts by the federal government to support nuclear have been focused on modular plants.
The most disappointing aspect of the project has been the inability of the industry to learn from its mistakes. Many of the delays at nuclear construction projects have to do with documentation and with sloppy work practices. Those issues plague nearly every nuclear construction project. In this case, the delays produce a cost per customer that is twice what was promised. We fail to see how the experience at Plant Votgle is supportive of a view that traditional nuclear generation is the way forward.
CFPP LLC, a wholly-owned subsidiary of Utah Associated Municipal Power Systems (UAMPS) submitted an application to the U.S. Nuclear Regulatory Commission (NRC) for a Limited Work Authorization (LWA), seeking approval to commence early construction activities for the CFPP (Carbon Free Power Project). The CFPP is proposed to be sited within the southwest region of the Idaho National Laboratory (INL) in southeast Idaho. The INL site, a U.S. Department of Energy (DOE) facility, covers an expansive area of approximately 890 square miles and is situated near Idaho Falls, Idaho.
The project is scheduled for an end-of-year 2029 commercial operation date. The license application will seek a license to construct and operate a nuclear power plant comprising six small modular reactors (SMRs) and associated common facilities.
The environment for nuclear has changed significantly since the project was undertaken. There is some serious money behind modular nuclear (public and private). The use of modular nuclear could be an answer to several problems especially those related to siting. Generation facilities at existing sites could be replaced by modular nuclear. Those sites already have access to transmission which is increasingly a hurdle to clean energy project development. Small nuclear could preserve some of the jobs associated with legacy generation and mitigate the impact on local tax bases.
BOSTON FOSSIL FUEL BAN
Boston Mayor Michelle Wu signed an executive order that prohibits city-owned buildings from being constructed or renovated in a way that allows for the use of fossil fuels. The order allows the City to move forward on fossil fuel bans while avoiding the bigger issue of opposition from the real estate development sector. municipal buildings will be constructed or renovated in a way that doesn’t allow for the use of fossil fuels like coal, oil or natural gas in heating and cooling, hot water and cooking operations. The order impacts the City’s real estate portfolio of 380 buildings with 16 and half million square feet.
The order exempts new projects that are currently in the procurement, design or construction phase. It will apply, however, to future capital projects such as the renovation of schools and construction of new police, fire and EMS stations and libraries. The private sector will be more difficult to address. The City Council approved ordinance changes proposed by Wu in April that requires new residential buildings to add wiring for future conversions to electrification and to add solar.
Under state law, Massachusetts cities and towns are not currently allowed to ban gas and oil hookups in new buildings or mandate all-electric construction. The Wu administration also plans to submit an application by the fall deadline, for acceptance into a state pilot project that will allow 10 Massachusetts cities and towns to ban gas hookups in new buildings. Boston won’t find out if it makes the cut until next March at the earliest.
PUERTO RICO
The U.S. Department of Energy (DOE) announced up to $453.5 million from the Puerto Rico Energy Resilience Fund (PR-ERF) aimed at increasing residential rooftop solar PV and battery storage installations. Potential applicants may include private industry, non-profit organizations, energy cooperatives, educational institutions, and State and local governmental entities.
The proposed funding is the first available through PR-ERF and totals $450 million is designed to incentivize the installation of up to 30,000–40,000 solar PV and battery storage systems for very low-income single-family households that are either: Located in areas that have a high percentage of very low-income households and experience frequent and prolonged power outages; or With a family member with an energy-dependent disability, such as electric wheelchair users or individuals who use at-home dialysis machines.
MARICOPA COUNTY TRANSIT TAX
The Arizona Legislature authorized Maricopa County to call a transportation tax election next year. The bill allows the county to ask its voters if they want to extend a half-cent sales tax to pay for a mix of transportation projects over the next 20 years. Of the estimated $14.9 billion projected to be raised by the tax, 40.5% would go to freeway projects, 37% to transit and 22.5% to arterial streets and intersection improvements.
Opponents have long sought to limit funding for mass transit in Phoenix especially expansion of the City’s light rail system. The power of that opposition is reflected in the agreed upon division of proceeds. The plan bars any spending on light-rail expansion, although it does allot 3.5% of transit dollars to maintain existing rail infrastructure. (The Valley’s light rail system currently runs from Mesa, through Tempe and north to Dunlap Avenue in Phoenix. An extension to south Phoenix is under construction.)
The transportation tax question is now projected to appear on the November 2024 ballot in Maricopa County. The plan will help pay for two new Valley freeways. A number of provisions aimed at reducing emissions from vehicles and other measures intended to reduce reliance on fossil fuels were deleted from the final bill.
It is worth noting that these results were reached in the midst of a record-breaking streak of days over 100 degrees in Phoenix. Remember the expansion of the highway system to the suburbs when you hear complaints about the heat in Phoenix. Maricopa County is the only one of the 15 counties that requires legislative approval to call a transportation election, as the result of 1999 legislation to address concerns raised by mass transit opponents.
CONGESTION PRICING AND ELECTRIC VEHICLES
The concept is after all called congestion pricing. It’s not called anti-pollution pricing or mass transit promoting pricing. It’s congestion pricing. Nevertheless, a group of Manhattan politicians is trying to convince the powers that be that electric cars should not be subject to congestion pricing. They make the case that “there are many goals of congestion pricing. One is congestion. One is the environment. There are other ones as well.”
Congestion pricing advocates like to point to the experience of cities overseas to justify the fees. Well, cities that offered EV discounts on congestion tolls are moving away from them. In Singapore and Gothenburg, the charges never discounted or exempted electric cars, while in Stockholm the exemption for EVs first did not apply to any electric vehicle built after 2012, and then was eliminated entirely. Transport for London announced that it would begin phasing out its 100 percent congestion charge discount for low-emission and electric vehicles, and completely do away with the discount on December 25, 2025.
CARBON CAPTURE
Navigator CO2 Ventures and a group of affiliates are developing the $3 billion Heartland Greenway Pipeline System that calls for 900 miles of steel pipe to be laid in 33 of Iowa’s 99 counties, from northwest Iowa to the southeast corner of the state. In mid-May, the Story IA County Board of Supervisors passed an ordinance establishing setback requirements that directly conflict with the proposed route of the pipeline and would limit the route the Iowa Utilities Board could ultimately approve.
Navigator is now suing the county in U.S. District Court, claiming the ordinance not only usurps federal and state regulatory powers over carbon dioxide pipeline construction but also superimposes Story County’s preferences for the project over other Iowa counties, the utilities board and Iowa citizens. Navigator argues that in Iowa, interstate and intercounty hazardous liquid pipelines are regulated by state regulations and by federal laws, such as the Pipeline Safety Act. In addition, the company says the federal Pipeline and Hazardous Materials Safety Administration prohibits state or local authorities from adopting safety standards applicable to such pipelines
These actions come as South Dakota opens its regulatory review of carbon pipeline applications. Navigator has offered landowners an average of $24,000 per acre in negotiations for easements to cross private land. It has also pledged the company will pay landowners “250% of crop damages” for as long as damages occur.
Opponents claim that the 250% figure is a cap on future compensation for losses which could mean that the protection would only be for two or three years. Navigator has easements with about 30% of affected landowners. The company has not yet used eminent domain. A pipeline proposed by Summit Carbon Solutions is scheduled for a permit hearing in September.
FLOODING
One of the issues which emerged from Houston’s flood experience several years ago was the development of land for housing in what turned out to be identifiable flood plains. The maps which were used were either improperly done originally or just ignored in a city with a history of minimal zoning restrictions.
The Texas Water Code (TWC), the Texas Water Development Board (TWDB) must develop and adopt a comprehensive state flood plan every five years that incorporates the 15 regional flood plans developed and approved by each regional flood planning group (RFPG). Those plans were submitted in January of this year. The data collected by the state produced these conclusions:
More than 2.4 million Texans live in areas that have a 1% chance of flooding each year, known as the 100-year floodplain. Another 3.5 million people live in areas with a 0.2% chance of flooding each year, known as the 500-year floodplain. One-fifth of the state’s land — roughly 56,000 square miles — now fall within the 100-year floodplain.
So, move to the coast? Between 2000 and 2019, rising sea levels caused the Texas coastline to retreat about 4 feet per year on average, according to a 2021 University of Texas Bureau of Economic Geology report for the Texas General Land Office. The San Jacinto region, which includes Harris County and Galveston, has the most people living in a floodplain: almost 2.5 million people are in a 100- or 500-year floodplain. The Lower Rio Grande region, which spans much of Texas’ southern border and includes the Rio Grande Valley, is next with about 1 million people at risk.
CHICAGO COMMUTER RAIL
A U.S. appeals court has ruled Union Pacific does not have a common-carrier obligation to continue operating commuter trains for Metra, the agency which provides commuter rail service in the greater Chicagoland area. According to May 2023 figures, the UP Northwest, North, and West lines are the second, third, and fifth most-used lines in the Metra system, accounting for just over 1 million riders that month.
The transfer will see train crews, mechanical, cleaning, ticket sales, rolling stock maintenance, and some engineering services move to Metra, while UP will continue to maintain and dispatch the three routes. Litigation commencing in 2019 made it obvious that UP wanted out of the passenger rail business. All three are former Chicago & North Western routes inherited by UP in its 1995 acquisition of the C&NW.
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