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January 27, 2006

The Heat Is On: Global Warming Conference This Weekend

This news just in: "Last year was the warmest the world has experienced since records began more than a century ago, the United States space agency, NASA, revealed last night... Mr Hansen [James Hansen, director of NASA's Goddard Institute for Space Studies,] blamed a build-up of heat-trapping greenhouse gases for making Earth heat up by just over 1F in the past 30 years." The Scotsman, 1/25/06.

The evidence keeps mounting that greenhouse gases resulting from energy production, such as the kind CUB helps monitor, are changing the planet we live on in dangerous ways.

For electric power in the U.S. alone, 2-1/2 billion metric tons of carbon dioxide (CO2) are produced in a single year. This is a large amount of carbon dioxide, but perhaps not a surprising number since approximately 50% of American electricity produced comes from coal generation, a major source of CO2. (These numbers apply to most recent year available, 2004, taken from the Energy Information Administration.) Of all the facts in dispute regarding global warming, it seems pretty clear by now that large quantities of carbon dioxide emissions, along with sulphur dioxide and nitrogen oxide emissions, are contributing mightily to the observable environmental changes that spell climate disruption and possible extinction for many species. Addressing this problem must include a change in how we produce electricity.

That work is being carried out in our region by groups such as The Climate Trust, the Energy Trust of Oregon, The Greenhouse Network, and many others. Founded by Professor Eban Goodstein of Lewis & Clark College, The Greenhouse Network is sponsoring a conference on global warming this weekend, the 14th conference on global warming the group has pulled together in the past 5 years! The Northwest Climate Education and Action Workshop begins on Friday afternoon at Lewis & Clark College and will continue throughout Saturday and on into Sunday morning.

As you might expect, CUB will be there to discuss clean energy. On Saturday morning at 9:30, CUB Staff Attorney Jason Eisdorfer will discuss Clean Energy Initiatives, such as carbon allowance standards, Oregon's existing Public Purpose Fund, the Portfolio of Energy Options offered by PGE and Pacific Power (putting them in the top 5 renewable purchasers nationwide), the West Coast Governors' Global Warming Initiative, and how to enhance our already-successful energy programs. Jason will form a panel with K.C. Golden of Climate Solutions and Chris Hagerbaumer of Oregon Environmental Council.

Then at 10:15 a.m., Jeff Bissonnette, CUB's Organizing Director, will take the stage to discuss Clean Energy & Electoral Politics, because it is important to be thoughtful about the policy that will bring about positive change, but it is just as crucial to be savvy about the politics that can make it happen. Joining the panel with Jeff will be Jefferson Smith of the Bus Project and Amy Hojnowski with National Environmental Trust.

In an article that discusses the politics surrounding global warming, Professor Goodstein writes: "A clean energy agenda is a way to stitch together many ... progressive themes: rewiring the world with safe, clean energy would create millions of new jobs, deprive Middle East terrorists of their source of funding, address the asthma crisis in our cities, stop oil drilling in sensitive habitat, and begin to stabilize the global climate." We agree.

That is why we fought against PacifiCorp's recent request to gain Public Utility Commission approval for a new pulverized coal generation plant. We argued that, with an already coal-heavy energy portfolio, PacifiCorp would be adding fuel to the fire of global warming, and exposing customers to unknown future financial risks (due to carbon regulation expected to be implemented within the next decade). This week, the PUC decided against acknowledgement of the new coal plant. We thank our allies in this battle for our shared victory: Renewable Northwest Project, Northwest Energy Coalition, and the Oregon Department of Energy.

The battle will continue on many fronts, large-scale electricity generation being only one of them. If you would like to learn more about the opportunities for cleaning up our energy policy, an absolutely necessary step for ourselves and our children, come out this weekend to the Northwest Climate Education and Action Workshop at Lewis & Clark College. Because, as climate expert Ross Gelbspan says, The Heat Is On.

Posted by Oregon CUB at 10:21 AM | Comments (0)

January 17, 2006

Don't think of it as rain, think of it as hydropower

A joke occurs frequently, and with increasingly deadpan delivery, in the family of this particular CUB staff member, every year that we have lived in the Pacific Northwest. "Look, it's raining. The crops are saved!" Moving from the Midwest made Oregon winters something we needed to joke about to get through, having traded the high winds and more extreme temperatures of the plains for a LOT of light gray rain.

The rain has been more present in the past few weeks than in past months or even the past few years, which have been more dry than usual in this part of the world. In fact, in a news release from March of 2005, Bonneville Power Administration (BPA) states: "Another winter of low precipitation makes six in a row -- the lowest cumulative runoff on record..." According to BPA Administrator Steve Wright, even the Dust Bowl years of the 1930s were not as dry as 2000-2005.

This winter and spring may see more precipitation due to a cooling of the Pacific Ocean, a climate pattern called La Nina, which "tend[s] to encourage wet weather in the Pacific Northwest." In another article devoted to the rain in last Thursday's Oregonian, the paper asserts: "A warm front moving in from the Pacific will dump more water on Oregon beginning this afternoon, and there's little hope for dry weather in the next six days. Although forecasters don't anticipate a crippling deluge, it will be enough to frustrate metro commuters, push swollen rivers in western Oregon to flood stage and punch portions of the Oregon coast especially hard."

Yes, but... If you can keep your head and feet dry, there's an upside to all that rain. First off, it's hydropower, and the more there is of it, the less expensive it will be on your electricity bill. More water in the Federal Columbia River Power System makes it less likely the utility companies will ask for higher rates based upon low hydro conditions, and makes it less likely that additional power will need to be purchased from the more expensive "spot market." The increase in rain has resulted in raising the water supply at the majority of Pacific Northwest dams to between 90 and 125% of average water levels. Compared to past years, snowpack is also looking good, and that will matter significantly as temperatures increase and we head into summer. (Information from the Northwest River Forecast Center of the National Weather Service.)

Secondly, the more rain and snowpack there is, the less likely it is that we will suffer a drought later in the year, and that is good for the populations of salmon, steelhead and other native fish which form a large part of the economy and the culture of the Pacific Northwest. The Federal Caucus (a group of nine agencies that includes BPA, the U.S. Army Corps of Engineers, and the U.S. Bureau of Reclamation) put out a Citizen Update from 2001 entitled Conservation of Columbia Basin Fish. Among the list of habitat strategies on which they focus, the Caucus lists "water quantity" as Number One, ahead of (but working in conjunction with) water quality, passage improvements, and watershed health.

So, yes, we all may suffer from a bit of Seasonal Affective Disorder by March. Yes, it's hard to keep track of enough hats, boots and umbrellas to stay dry. But on the other hand, it's great for keeping our bills down, our machines humming, and the salmon successfully swimming upstream. That's worth a lot.

Posted by Oregon CUB at 12:52 PM | Comments (0)

January 06, 2006

MidAmerican Case Reaches Settlement Agreement

A lot happened over the holidays, and if you weren't deliberately avoiding the newspapers (we did some of that ourselves), you may have heard the news: The MidAmerican offer to purchase PacifiCorp (Pacific Power here in Oregon) from ScottishPower was settled in late December. The parties to the case, including CUB, the Industrial Customers of Northwest Utilities, and the Staff of the Public Utility Commission, reached a Settlement Agreement that should allow MidAmerican Energy Holdings Co. to move ahead with becoming the new owner of PacifiCorp.

The current owner of PacifiCorp, ScottishPower, is a multinational corporation that has expressed interest in selling PacifiCorp, and which has itself been under threat of takeover. The end result of the MidAmerican case might have looked very different had PacifiCorp been a stand-alone company -- our approach to it would certainly have been different. In this case, however, the choice was between the current international corporate holding company and a potential national holding company. The devil, as they say, was in the details.

And the details of this Settlement include substantial commitments from MidAmerican on a number of fronts that are important to Pacific Power customers. MidAmerican made 53 commitments to all the states within the PacifiCorp territory (Oregon, Utah, Idaho, Wyoming, California, and Washington) and another 34 commitments that were negotiated by Oregon parties for the benefit of Oregon customers (on issues such as global warming, low-income assistance, access to information, and more). The most important commitments include:

1) Rate Credits: MidAmerican has promised $143 million in rate credits for customers, $40 million of that just for Oregon, most of those credits to be given within the next 5 years. All of these credits for all states were won in settlement negotiation by Oregon parties. This is not a large amount of money per customer, but does force MidAmerican to think about cost efficiency issues. In addition, the strong arguments of CUB and PUC Staff about customer rates and a real "net benefits" standard forced MidAmerican to give a more in-depth analysis of their proposed investment strategy for the utility. This analysis shows that many of their investment plans were not significantly different from the plans already in place under ScottishPower. Most importantly, this means that rates for Pacific Power customers are expected to be lower under MidAmerican ownership than they would have been under ScottishPower.

2) Developing Renewables: CUB has made addressing the issue of global warming emissions resulting from energy production a larger part of our mission. We took that new sense of urgency into these settlement negotiations and are happy to report that MidAmerican responded with some meaningful renewable energy commitments. MidAmerican has committed to developing almost 300 megawatts of new renewable energy by the end of 2007. For perspective, this is more renewable power than PGE and Pacific Power have purchased, together, in the past five years. In addition, MidAmerican has affirmed their support for the conservation and renewables programs managed by the Energy Trust of Oregon. Finally, MidAmerican has said they will turn over the steam rights to the Blundell Geothermal Plant in Utah to PacifiCorp, at no cost, making it possible for PacifiCorp to pursue expansion of this plant.

3) Local Control: Maintaining a reasonable amount of local control became a ground level issue for CUB, as we examined the dangers not only inherent in holding company structures, but how those dangers were exacerbated by last year's repeal of the Public Utility Holding Company Act of 1935. MidAmerican has stated that PacifiCorp headquarters will remain in Oregon. They also were responsive to concerns about PUHCA repeal, agreeing to retention of, and access to, records at both MidAmerican and at Berkshire Hathaway (which owns MidAmerican). MidAmerican also agreed to provide "ring-fencing" around PacifiCorp, a method of financially and structurally protecting the utility from any economic trouble suffered by either holding company. Finally, it was agreed that Warren Buffet (who owns Berkshire Hathaway) would exercise no control over the PacifiCorp, nor could his heirs inherit a power of control over the utility.

Part of the test of any merger or acquisition case is whether the people at the purchasing company are people you can work with. We found the negotiating staff of MidAmerican to be more creative and willing to find common ground solutions than ScottishPower has been.

By working out this Settlement agreement, we at CUB are not advocating ownership by a large holding company as our preferred utility model, by any means. The choice in this case was whether to stay with Scottish Power ownership, ownership which has pushed hard for higher rates almost every year, or whether to allow the purchase by MidAmerican to go through. CUB staff worked hard on these negotiations during the first 3 weeks of December. We believe the deal we worked so hard to reach is one that will offer some real improvements, or in PUC lingo, some real "net benefits" to Oregon customers.

Posted by Oregon CUB at 10:15 AM | Comments (0)