PrintNovember 4, 2007
Electric Power Generation vs. Soft America
The estimable Michael Barone wrote an excellent book in 2005 titled Hard America, Soft America: Competition vs. Coddling and the Battle for the Nation's Future. Inspired by a column he wrote in 2003, the book posits that there are two Americas: soft America and hard America. (Perhaps this is where John Edwards got his two Americas idea).
Barone argues that hard and soft America metaphorical proxies of the never ending struggle between New Deal Liberalism and Free Market Conservatism. The settlement last month of an old 1999 lawsuit over emissions from coal-fired power plants in the Ohio River Valley is a good example of Barone's thesis in action. It was reached among American Electric Power ("AEP"), nine Northeastern and Midatlantic states, the EPA and a number of environmental groups, including the Natural Resources Defense Council and the Sierra Club. The settlement requires AEP to meet annual sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions limits for its fleet of 16 coal-fueled power plants in Indiana, Kentucky, Ohio, Virginia and West Virginia. 
Coal Barge on the Ohio River. The Washington DC Metropolitan Area gets nearly 70% of its electricity from coal (photo courtesy of AEP)
AEP also will provide $36 million for environmental projects coordinated with the federal government and $24 million to the states that were parties to the agreement for environmental mitigation. AEP will pay a civil penalty of $15 million.
From the standpoint of ratepayers and consumers across the Eastern U.S., the whole lawsuit was a big waste of time and money. The basic premise of the lawsuit was dubious at best. AEP has been making these capital improvements all along to improve operational efficiencies. While, legions of lawyers from soft America were busying themselves ringing up thousand upon thousand of billable hours, hard America, AEP, was actually doing the real work of getting out there and cleaning up the air. The $60 million in environmental projects are essentially court-ordered pork barrel spending.
Like all good pork barrel schemes, the Settlement throws a bone to almost everyone. Maryland gets a Chesapeake Bay project, there's a truck stop electrification program, and of course, no environmental pork barrel program would be complete without hybrid vehicles. Undoubtedly, the environmental groups are getting some sort of benefit of this as well.
The lawsuit was a spoiled leftover from the Clinton's litigious approach to everything. From terrorism to the environment, their first impulse was always call the lawyers. This lawsuit came out of their politically-motivated interpretation of the New Source Review (NSR) rules concerning maintenance and pollution control upgrades of coal fired power plants. Like all spoiled leftovers from Clinton, this on has that familiar pungent aroma.
Before Clinton and his trial lawyers pals came on the scene, the rule was interpreted to allow plants built prior to NSR's adoption in 1977 to be "grandfathered," only required to install pollution controls when they are expanded or substantially upgraded. Plants were permitted to undertake routine repair and maintenance without triggering NSR's requirements. Under Clinton, changing a light bulb at the plant could trigger an NSR giving Clinton's trial lawyer cronies a pretext to make a claim.
The effect of the Clinton policy was to increase pollution from these power plants because they were discouraged from doing routine maintenance like replacing worn-out boiler tubes or boiler fans. This made the plants less reliable, less efficient and more polluting. In 2003, President Bush finally got around to ending this failed policy. Writing at the National Review in October 2003 Jonathan Alder covered the President's announcement of his new policy at Michigan's largest coal fired plant in Monroe. The plant is very important to Michigan, producing 3000 megawatts of power. Adler describes the adverse impact of Clinton's NSR policy on the environment:
"For years Detroit Edison has sought to replace the turbines at the facility to increase its operating efficiency. Now that some of the President Bush's NSR reforms are finalized, the replacement will proceed. A more efficient plant will produce more energy without increasing its emissions. As this energy needs to be produced somewhere, the net result of the Detroit Edison upgrade will be less air pollution, not more."
Clinton's soft America produced tons of legal briefs and legal fees but not one ton of reduced emissions or any environmental clean up. Bush's hard America derailed Clinton's lawyer gravy train and implemented policies that will tangibly reduce air pollution. AEP has been a favorite punching bag for the self-appointed environmentalists. They are one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP is the target because most of their generating capacity is coal fired because it is the least expensive available fuel in their service territory. But remember, eco-dogma, coal is bad, solar, wind good.
Fortunately for the people of the Northeastern states that brought this lawsuit, hard America AEP forges ahead with investments in power lines to provide affordable electricity to their citizens. In September 2006, AEP announced plans to construct a major electric transmission line covering 550 miles from the Winfield West Virginia on the Ohio River to Central New Jersey.
765-kilovolt transmission tower bringing abundant and affordable coal generated electricity to the Washington DC Metropolitan Area (photo courtesy of AEP)
Designed to relieve critical congestion in the power grid and provide additional energy to states that do not have enough capacity to meet their own demand, like Maryland New Jersey, and the District of Columbia. The project was designated a National Interest Electric Transmission Corridor by the Department of Energy. This is the first transmission facility to seek this designation provided under the Energy Policy Act of 2005. It was included in the act to facilitate badly needed transmission capacity by encouraging utilities to make the huge investments and mitigate the substantial regulatory risk.
Top Ten Energy Importing States
State | Net Summer Capability (megawatts) | Net Generation (megawatt hours) | Total Retail Sales (megawatt hours) | Net Surplus (deficit) |
61,707 | 200,292,819 | 254,249,507 | -53,956,688 | |
22,599 | 78,943,045 | 108,849,552 | -29,906,507 | |
17,536 | 60,549,582 | 81,896,813 | -21,347,231 | |
12,503 | 52,661,601 | 68,365,385 | -15,703,784 | |
12,105 | 53,018,995 | 66,019,053 | -13,000,058 | |
806 | 226,042 | 11,816,207 | -11,590,165 | |
3,160 | 10,824,984 | 21,852,681 | -11,027,697 | |
13,969 | 47,515,443 | 57,227,588 | -9,712,145 | |
16,208 | 61,824,664 | 70,335,683 | -8,511,019 | |
20,749 | 97,117,166 | 103,905,421 | -6,788,255 |
Source: Energy Information Agency
It's no coincidence that most of the largest energy importing states are bastions of soft America. Energy and environmental policy over the last three decades or so ordained this situation. The planned 765 KV high voltage line is a real plus for the environment. It will allow several high pollution plants to be shutdown because of reduced energy loss in transmission. Higher voltage lines have lower power loss. Additionally, transmission capacity is required to facilitate the development of "renewable energy sources." promoted by environmentalists as the panacea of our energy future.
The John E. Amos Plant, a coal-fired plant in Winfield, West Virginia, has a generating capacity of 2,900 megawatts. Amos is AEP's largest generating plant. It produces enough electrity to heat, light and air conditon the entire District of Columbia. (photo courtesy of AEP)
Special interest environmental groups like the Sierra Club must have some other agenda besides cleaning up the environment. They certainly are not contributing anything with their lobbying and litigation campaigns. Arguably, their actions are harming the environment. Reflecting this is an essay at the Huffington Post written by Carl Pope a Sierra Club lobbyist. He crows about the settlement and takes a ridiculous swipe at AEP's planned transmission line.
Showing America's softer side , the lobbyist spins the settlement as a victory and then turns his sights on AEP's planned power line. Pope writes:
"Efforts, for example, to repeal the provisions of the 2005 Energy Bill that give the federal government the right to seize private property for the benefit of utilities, have failed to date in both the House and Senate -- and failed even though they have unpopular and unsupportable consequences: these National Interest Electric Transmission Corridors greatly expand the federal government's powers of eminent domain, override state/local control and federal environmental regulations, and are designed exclusively to allow utilities like AEP to ship cheap electricity from dirty, aging coal-fired power plants in the Ohio River Valley and Appalachia into high-rate electricity markets like New York City".
A Turbine at John Amos Station. (photo courtesy of AEP)
How many kilowatt-hours of electricity has the Sierra Club ever produced? Nada, zip, zero. Pope's statement is patently false. As I described above, the transmission line will be a net plus for the environment. Pope's parochial and self interested accusation is wrong and dangerous. Obviously, this provision was not designed "exclusively" to allow AEP to ship cheap dirty electricity for consumption by people in Manhattan. This case clearly demonstrates how ineffectual and counter-productive the Sierra Club-Clinton administration energy policies are. Perhaps the Sierra Club can light their palatial C Street Washington offices with candles and use kerosene heaters in the winter. Or better yet, they can simply freeze to death in the dark.
Bush undertook an Augean task of undoing the damage caused by Clinton's soft America energy policies. Once again, the voters have a choice. They can vote for soft America and let the lights go out or they can vote for hard American and keep the lights on. This shouldn't be a difficult choice, just ask former California Governor Gray Davis.
