Natural Gas - A devastation arial view

By TxSharon - Daily Kos - June 15, 2009

Spot bids to blame for high electricity bills, AARP says

By ELIZABETH SOUDER - The Dallas Morning News - Thursday, May 7, 2009



AARP says it's found the real reason that Texas electricity prices are so high.

A study, released Tuesday and funded by AARP, concludes that Texas could cut consumer electricity prices by $956 million a year, or $52 annually for the average household, by making the wholesale power market more transparent.

The Electric Reliability Council of Texas, which operates the Texas power grid, waits 60 days to disclose information about some types of wholesale electricity bids. That gives power companies time to operate in secret and potentially manipulate prices, according to the report.

"Because of the lack of transparency, all [observers] know is that the prices are doing something odd. They don't actually know what's happening in the market that's causing the prices to be high," said Robert McCullough, head of McCullough Research and author of the report.

The report calls on state lawmakers to pass legislation filed by Sen. Rodney Ellis, D-Houston, and Rep. Todd Smith, R-Euless, to require that all spot market bids be disclosed within two days. The bills remain in committees in the Texas House and Senate.

The Public Utility Commission, which oversees ERCOT, addressed the transparency issue four years ago by requiring the grid operator to disclose in 48 hours information about the bids that set the market price. In the Texas market, the highest electricity bid that ERCOT accepts at any given moment sets the price for all generators – even those generators that turned in lower bids.

ERCOT must disclose information about all the other bids in 60 days.

Prior to the new rule, ERCOT took six months to disclose bid information.

"I think it works well. I think wholesale prices are down," said PUC Chairman Barry Smitherman. "I think firms, many firms, are reluctant to offer at high prices because they are afraid of the publicity associated with that. That kind of sunshine was exactly what we intended."

Waiting 60 days to reveal certain bids was part of a compromise to prevent a lawsuit. Constellation Energy said a 48-hour transparency rule would require wholesalers to reveal sensitive information and destroy their business.

TXU Wholesale, now a unit of Energy Future Holdings called Luminant, argued at the time that disclosing bid information could even help competitors raise market prices, not lower them.

A small fraction of power trades over the spot market. Most retail electricity companies buy power directly from wholesalers.

But the wholesale market tends to influence negotiation of those one-on-one deals, the report states. Ultimately, the wholesale trades affect all consumers.

The report also states a common complaint about deregulation among consumer advocates. In a regulated environment, the PUC sets consumer rates based on utility costs plus profit margin.

"Deregulation has broken the long-standing bond between what it actually costs to generate electricity and what consumers ultimately pay," the report states.

Commodity markets tend to set prices based on supply and demand, rather than the cost to provide the commodity.
Read more in the Dallas Morning News

Ex-Dallas mayor Ron Kirk to help lead lobbying group

By ELIZABETH SOUDER - The Dallas Morning News - Monday, October 22, 2007

Former Dallas mayor Ron Kirk will help lead a lobbying group that stumps for deregulation of electricity markets.


Mr. Kirk, a partner with law firm Vinson & Elkins who ushered the TXU Corp. buyout through the Texas Legislature, will be co-chairman of the Compete Coalition.

The coalition said in a press release Monday that former Oklahoma Republican senator Don Nickles will also be co-chairman of the group.

People in several states have begun debating whether deregulation is such a good idea, in light of higher prices. In Texas, a few policy makers have said they worry that the state’s deregulated market could be in jeopardy, though no one has used the R-word here: Re-regulate.

The coalition also said Monday it launched an advertising campaign supporting deregulation.
Read more in the Dallas Morning News

Failed Utility Policy in Texas

By Faith Chatham - DFWRCC - Oct. 7, 2007

TXU, Shell plan Panhandle wind farm

By JIM FUQUAY - Fort Worth Star Telegram - Jul. 27, 2007
TXU Corp.’s generating subsidiary and Shell WindEnergy Inc. plan a huge Panhandle wind farm that could include the use of compressed air to generate electricity when there’s not the right amount of wind to spin the big turbines.

The 3,000-megawatt facility is slated for Briscoe County, southeast of Amarillo. That’s about the same size as the wind farm recently announced by Texas investor Boone Pickens, whose Mesa Power is seeking to install between 2,000 and 4,000 megawatts of wind power in four Panhandle counties.

The companies did not say when they expect to begin the project. They said they also plan to work together on other renewable energy projects in the state.

Greg Wortham, director of the West Texas Wind Energy Coalition in Sweetwater, said Briscoe County is “the platinum region” of wind resources. He said wind companies have been very active leasing land there “at higher bonuses than paid anywhere else.”

Wortham also said that to his knowledge, the Luminant-Shell project would be the first in the United States to use compressed air to generate electricity, although it has previously been used with other generating technologies. The idea is to use electricity generated in periods of low demand to pump air into underground storage, then use that pressurized air to drive turbines to generate electricity in times of high demand.

“The holy grail is to find a way to store wind energy,” he said, so that it can supply electricity on demand, just like power plants that rely on natural gas, coal or nuclear. On average, wind farms operate at peak capacity only about 30 percent of the time, and that drops to less than 10 percent during the hottest summer days in Texas, when wind drops but electricity demand surges.

Wind farms that supply a more constant stream of electricity also would help make the construction of high-voltage transmission lines more cost-effective, since the wires must be designed to carry a peak load whether it’s delivered or not. The Public Utility Commission last week recommended eight zones as the best routes for new transmission lines to serve Texas wind farms.
Read more in the Star Telegram

Study says 9 Texas power plants among worst polluters,

A liberal dose - Copyright © 2007 - July 27, 2007
Texas is home to many of the nation's worst-polluting power plants for emissions of toxic mercury and greenhouse gases linked to global warming, according to a new study by a national nonprofit advocacy group.

Four East and East Central Texas power plants operated by TXU Corp. are highlighted in the study titled 'Dirty Kilowatts,' released Thursday by the Environmental Integrity Project, which ranked the nation's 50 biggest polluting power plants based mostly on 2006 federal data.

TXU's Martin Lake plant in Rusk County, about 170 miles east of Fort Worth, is the nation's top mercury polluting power plant, and the fifth-biggest emitter of carbon dioxide, the chief manmade greenhouse gas, according to the 63-page study.

But Dallas-based TXU announced last month that it will add pollution controls at the 2,250-megawatt Martin Lake plant, and three others, to reduce emissions of mercury, a dangerous neurotoxin linked to birth defects and developmental disorders.

'We're retrofitting these plants with state-of-the-art emission controls,' said Tom Kleckner, a company spokesman. 'We've worked with federal regulators to address emissions in the past and will continue to do so.'

Energy industry representatives note that carbon dioxide emissions from power plants decreased slightly from 2005 to 2006.

Still, more than 100 new power plants are planned nationwide in the next 25 years. These plants will dramatically increase carbon dioxide emissions over the next two decades unless the federal government regulates carbon for the first time, said Ilan Levin, an Austin attorney and the report's lead author.

'The best way to stop making the problem worse is to put a cap on carbon emissions,' said Bruce Nilles, Sierra Club's national coal campaign director.

The issue

Nine Texas power plants rank among the biggest emitters of toxic mercury and/or carbon dioxide, according to a study by the Environmental Integrity Project.

The study's authors want federal regulators to crack down on mercury from power plants and to regulate carbon dioxide for the first time. They warn that emissions of carbon will increase substantially over the next 25 years without carbon regulations.

Scott Segal, director of the Electric Reliability Coordinating Council, an industry trade group, said emissions from the proposed power plants 'are technologically advanced and well-controlled.'

What it means

Mercury is a dangerous neurotoxin, and five power plants in East and East Central Texas are among the 10 biggest mercury polluters in the country, according to the study.

In addition, Texas already leads the nation in emissions of carbon dioxide, the primary manmade component of global warming. Two plants in East Texas rank among the 11 biggest carbon polluters.

Texas plants

The nine Texas power plants that rank among the leaders for emissions of mercury and/or carbon dioxide are:

Martin Lake, in Rusk County, operated by TXU Corp., ranked No. 1 for mercury emissions and No. 5 for carbon dioxide.

Monticello, in Titus County, operated by TXU, ranked No. 4 for mercury and No. 11 for carbon dioxide emissions.

Big Brown, in Freestone County, operated by TXU, ranked No. 6 for mercury emissions.

H.W. Pirkey, in Harrison County, operated by American Electric Power, ranked No. 8 for mercury.

Limestone, in Limestone County, operated by Texas Genco, ranked No. 10 for mercury, and No. 34 for carbon dioxide.

W.A. Parish, in Fort Bend County, operated by NRG Energy, ranked No. 16 for mercury and No. 6 for carbon dioxide.

Sandow, in Milam County, operated by TXU, ranked No. 41 for mercury.

O.W. Sommers, in Bexar County, operated by the city of San Antonio, ranked No. 43 for mercury.

Sam Seymour, in Fayette County, operated by the Lower Colorado River Authority, ranked No. 49 for carbon dioxide.

Deregulation - Why You Pay More

by lightseeker - Texas Kaos - Wed Jul 18, 2007
The short and sweet of this TV report is this:

But the bottom line is: Consumers in deregulated areas of the state are paying more. For 1,000 kilowatt hours, which is typical for a Texas home, TXU charges $129.70. Its lowest-priced competitor, Amigo Energy, charges $114.90.

But if you live in the state capital, your bill from Austin Energy is just $87.28.

And why? It's the free market stupid!

Deregulation: Raw deal for power users

Austin Energy operates much like TXU did before deregulation; the customer's bill is based on the cost of making electricity. The city of Austin owns gas-burning plants, coal-fired generators and part of a nuclear station. Because gas prices have tripled in recent years, they use the gas plants as little as possible, and pass the savings on to consumers.

"And that cost can be five to ten times as much as if you were able to get coal or nuclear-based power," explained Austin Energy spokesman Michael McCluskey.

TXU owns coal, gas and nuclear plants, too. But under the deregulation law, the power generation part of the company—Luminant—is now separate. It sells the power it makes to TXU and other competitors on the open market—often for much more than it costs to generate.

"They're charging you for all the electricity they sell, as if it were made from natural gas," Smith said. "About 60 percent of the electricty you consume is coming from coal and nuclear power plants, which provide electricty at a fraction of the cost."

Read more

Deregulation: Raw deal for power users
By GARY REAVES - WFAA-TV - Friday, July 13, 2007
AUSTIN — He's lowered the temperature; installed efficient lights; even installed a smaller dishwasher.

But frugality isn't the only reason Mike Sloan's electric bills are ridiculously low.

The primary factor is where he lives—Austin. The power company is owned by the city and is committed to keeping rates low.

Most Texans get power comes from private companies like TXU that also have to make a profit.

TXU in North Texas, like Reliant Energy in Houston, had been monoplies, with prices regulated by the state. State lawmakers figured if they broke up the monopolies and made them compete with one another, competition would push prices down.

Instead—fueled by the rising cost of natural gas—electric bills skyrocketed.

"You're paying a Cadillac price for Chevrolet power in the D/FW area," said Tom Smith, director of the Texas office of Public Citizen, a consumer advocacy group. "The reason TXU is charging you so much is because of deregulation."

Austin Energy operates much like TXU did before deregulation; the customer's bill is based on the cost of making electricity.

The city of Austin owns gas-burning plants, coal-fired generators and part of a nuclear station. Because gas prices have tripled in recent years, they use the gas plants as little as possible, and pass the savings on to consumers.

"And that cost can be five to ten times as much as if you were able to get coal or nuclear-based power," explained Austin Energy spokesman Michael McCluskey.

TXU owns coal, gas and nuclear plants, too. But under the deregulation law, the power generation part of the company—Luminant—is now separate. It sells the power it makes to TXU and other competitors on the open market—often for much more than it costs to generate.

"They're charging you for all the electricity they sell, as if it were made from natural gas," Smith said. "About 60 percent of the electricty you consume is coming from coal and nuclear power plants, which provide electricty at a fraction of the cost."

TXU spokeswoman Lisa Singleton said its Luminant division charges a "fair, market-based, wholesale price for the power produced." She said there were other factors beyond the price of gas that determine the price per kilowatt.

But the bottom line is: Consumers in deregulated areas of the state are paying more.

For 1,000 kilowatt hours, which is typical for a Texas home, TXU charges $129.70. Its lowest-priced competitor, Amigo Energy, charges $114.90.

But if you live in the state capital, your bill from Austin Energy is just $87.28.

Privately-owned utilities that are still regulated also charge less.
Amarillo consumers pay $78.84;
in Beaumont, 1,000 kilowatt hours is just $72.24.
Both cities get more of their power from cheaper coal or nuclear power, but since they remain regulated, consumers get the benefit of their lower costs.

Critics say these numbers prove deregulation isn't working. But a recent state study of the last four years says that without deregulation, we'd be paying even more.

"We concluded the average customer in Dallas and Houston has saved money—about $800 in Dallas and about $1,400 in Houston," said Barry Smitherman of the Texas Public Utility Commission.

He concedes that deregulation would have worked better if gas prices had stayed low. Smitherman says if customers will shop around, they'll put pressure on TXU and others to cut prices.

With time and competition, the PUC predicts rates will come down—but they're not likely to ever be as low as Mike Sloan's deal in Austin, where the power company is busy pushing a conservation scheme by installing thousands of thermostats designed to shut down air conditioners for up to 20 minutes an hour.

That will delay the need to build two new and expensive power plants.

Also Online
Texas Electric Choice from Texas PUC

Who benefits from electricity deregulation? from Public Citizen

TXU Energy official site

Austin Energy official site

More stories by Gary Reaves

Politics and Power - TXU’s 800-pound gorilla blocks out the sun’s energy.

By JIM DUNCAN - The Fort Worth Weekly - Wednesday, June 27, 2007

I started my first business in the obscure solar electric installation field in 1993. Over the years, I have witnessed the gradual decrease in the price of pure silicon, the power source that is the heart of the solar panel. I waited for the cost of a kilowatt hour of solar-generated electricity to edge low enough to compete with heavily subsidized, non-renewable utility power.

The decline slowed, stopped, and then reversed around 2002 as the worldwide demand for solar modules began to skyrocket. Our domestic solar PV (photovoltaic) industry was quick to blame the surge on growing demand in Germany, which had instituted an aggressive national program designed to reduce its massive appetite for coal-generated electricity and replace it with solar and wind energy. Then China came into the picture, an investor-rich nation also intent on reducing its deadly dependence on coal for electricity.

Two nations with the same goal but vastly different strategies. German solar companies began buying up every available PV-related business they could find, while China started building their solar production infrastructure from scratch. Each nation was increasing its domestic investment in clean, renewable energy by 20 percent to 30 percent per year. The predictable effect was a worldwide shortage, and price spike, in semi-conductor-grade silicon wafers.

Then there’s the United States.

At a distant third behind Japan and Germany, and just barely ahead of Spain in total PV production and installation, the U.S. should still be leading the world in both categories. The photovoltaic cell was developed and patented here in the mid- 1950s, giving us an untouchable lead in production for decades — until a handful of electric utilities became aware of the potential of solar power.

The oil embargo of the ’70s forced a panicky Congress to require utilities to evaluate and consider solar and wind as alternative sources of electric power. Unfortunately for all Americans since, the utilities insisted on “helping” Congress write the language of these requirements. The result: rules that assigned virtually no value to those renewable energy assets, namely free fuel-generating non-polluting power. Only the cost per kilowatt-hour mattered to Congress.

It also assures that as long as the costs of coal, natural gas, and nuclear generating plants are subsidized heavily enough by the taxpayers, and the development of a solar PV industry in the U.S. is not, traditional fuels will always appear cheaper.
The 2007 Texas Legislature had a chance to make a difference in the state with some of the highest electric rates in the nation. A bill creating the “Texas Solar Energy Rebate Program,” similar to 18 other states’ programs, would have established a statewide, one-time rebate offsetting almost half of the cost of a residential solar electric installation. The cost would have been modest — 50 cents per thousand kilowatt-hours per household. However, it died in committee, just as most pro-renewable energy legislation has in past sessions.

That brings me to what I really wanted to talk about:

Over the years, I have had a fair number of my editorial replies published in the Fort Worth Star-Telegram and elsewhere, mostly on topics such as clean air, renewable energy, Joe Barton, concrete plants, and TXU.

Now anyone in the advertising industry understands the influence that advertising dollars have over the print, television, and radio media. When I suggested that TXU’s pumped-up ad spending was affecting the Star-Telegram’s coverage of renewable energy legislation, a veteran reporter there laughed it off.

The reporter also told me that TXU had almost 120 full-time paid lobbyists at the state capitol this session — double what they had when I visited the capitol earlier this year with several dozen others from the renewable energy industry to push for favorable legislation.

So I related to him the experience I had five years ago, while representing a nonprofit renewable energy group applying for donated booth space at Mayfest.

TXU was an underwriter and, as I was informed by an organizing committee member, TXU attempted to block our nonprofit’s access. The attempt was overruled by others who better understood the spirit of the event and the educational value of our presence. Thus our group was invited back over the next four years to promote solar and wind energy to as many as would listen.

I hope that will help folks understand why most North Texans won’t see lower electric rates any time soon, if ever, and why there will be no significant legislation that will rein in TXU and its sociopathic rampage to generate profits only on its own terms. And why you will find that generating your own clean electric power from free and abundant sunlight will, for the near future, still be just a bit more expensive than electricity from coal-burners.

Jim Duncan is the owner of North Texas Renewable Energy, Inc.

This is only one of several "worth reading" articles in the Fort Worth Weekly

Green business group says its work not done

by Margaret Allen - Special to Houston Business Journal - March 2, 2007

Texas Business for Clean Air was formed by three Dallas businessmen in December to fight for clean air in North Texas. The 200-member group advocates for energy efficiency and protests construction of new coal plants using old technology -- particularly the 11 proposed by TXU Corp., now trimmed to three.

New York-based Kohlberg Kravis Roberts & Co. and Fort Worth-based Texas Pacific Group announced this week that they will pay $45 billion to acquire TXU and take the electricity giant private.

Days after the announcement, the Dallas Business Journal, a sister paper of Houston Business Journal, interviewed the co-chairmen of the clean-air group, David Litman, Internet business guru and founder of www.consumerclub.com, and Garrett Boone, co-chairman and founder of Dallas-based The Container Store.

DBJ: What's your reaction to TXU's possible acquisition and its plan to slash the number of coal plants it will build?

DAVID LITMAN: We're thrilled that eight coal-fired power plants have been taken off the table. We're also pleased the projected new owners seem to be sensitive to business and environmental concerns, especially concerning clean air. But we have to look at the plants that are being constructed, and we have to examine the details of those. There are many unanswered questions.

DBJ: TXU argued the coal plants are needed to meet future demand. Do you agree?

LITMAN: Texas was facing a shortfall of peak-load capacity, according to the Electric Reliability Council of Texas, starting in the years 2008 and 2009. Let's just take the old TXU plan: It didn't address those years. The plants weren't scheduled to be built and online until 2010. We had thoughts on how to deal with that.

DBJ: How?

LITMAN: First, 3,000 megawatts of capacity in brand new gas-fired power plants near Houston have been mothballed. Those could be used to generate peak load because they can be fired up quickly and brought down quickly. That's not the case with base-load generation like coal and nuclear.

Secondly, there are a number of efficiency measures we can undertake with regard to electric use. There are many examples. Two include interruptible load, in which industrial concerns allow their electric supply to be interrupted in exchange for a lower electricity rate during the year. Texas already has 1,100 megawatts of that. Before deregulation, we had over 3,000 megawatts. We think it would not be difficult to increase that capacity during peak periods.

Also, we could install intelligent metering in homes and businesses so consumers know every 15 minutes what the cost of their power is. During peak times, they reduce usage. That reduces peak demand, which is the most expensive, because right now we're building plants to run literally just a handful of days a year.

DBJ: Would that require the Texas Legislature to act?

GARRETT BOONE: I'm not sure it needs to be mandated so much as facilitated. Also, we're not anti-coal, but we want to minimize coal and maximize energy efficiency. It's possible it could be done by developing technology that could be exported to India and China and the rest of the world, where they're opening a new coal plant a week.

DBJ: The Texas Association of Business favored TXU's plan. Are you at odds with them?

Babcock & Wilcox to continue work on three TXU coal-fired projects

Houston Business Journal - April 19, 2007

The Babcock & Wilcox Co. has reached a settlement with affiliates of TXU Corp. over eight coal-fired boilers and other equipment ordered for TXU's solid-fuel, power-generation program in Texas.

Dallas-based TXU (NYSE: TXU) ordered the units in June 2006, but announced its intent to curtail the projects in February 2007. The companies now have agreed to terminate five of the contacts. TXU has paid B&W an additional $79.3 million in respect of these projects and will take title to the equipment and materials produced or procured for them.

Meanwhile, B&W, a subsidiary of Houston-based McDermott International Inc. (NYSE: MDR), will continue to fulfill its contracts on the remaining three units and will supply them to TXU.

The combined remaining value associated with the three contracts was about $350 million as of Dec. 31.

Read more about Babcock & Wilcox
Read more about McDermott International

TXU inks wind power deal

Dallas Business Journal - May 15, 2007

TXU Corp. has inked a deal with Airtricity, a Dublin, Ireland, renewable energy company, that will add 209 megawatts of wind power to TXU's portfolio.

Under the five-year deal Airtricity will provide Dallas-based TXU (NYSE: TXU) with wind power from a wind farm Airtricity is building southwest of Abilene. The project is expected to be completed by the end of the year.

Read more