Background on new Iowa Utilities Board Chairman Rob Berntsen

Governor Chet Culver made two appointments to the Iowa Utilities Board this week. He named Rob Berntsen as the IUB’s new chairman, replacing John Norris. Norris stepped down from the IUB in order to serve as chief of staff for Agriculture Secretary Tom Vilsack.

Culver also reappointed Krista Tanner as one of the IUB’s three members. Culver appointed her in 2007 to serve out the remainder of someone else’s IUB term, which expires at the end of April. Now she will serve out the remainder of Norris’s term, which ends in April 2011.

The governor named Berntsen for the full six-year term that begins on May 1 and expires in 2015. (The third IUB member, Darrell Hanson was appointed by Culver in 2007 for a term that expires in 2013.)

Join me after the jump for more background on the new IUB chairman, along with some speculation about what can we expect from the board.  

Continue Reading...

The Marshalltown coal plant is dead

Here’s some good news for the environment and public health:  

Interstate Power and Light on Thursday canceled plans for a $1.8 billion coal-fired power plant in Marshalltown, citing the economy and uncertainty over state regulations. […]  

“At the end of the day it’s economic condition, uncertainly regarding future regulatory and legislative treatment of environmental issues, meaning greenhouses gases,” said spokesman Ryan Steensland.

Other factors were terms placed on the power plant by the Iowa Utilities Board, including a 10.1 return on equity for investors. “It would have made it very challenging to attract the capital necessary to build these types of investments. The cost and the return laid out by the board just did not wet the appetite of the investment community to move forward with this project,” Steensland said.

 

Economic concerns prompted a different company to pull the plug on a proposed coal-fired power plant near Waterloo earlier this year.

Thanks to all the environmental and public-health advocates who have worked so hard for years to defeat both coal plants, including the Sierra Club, Plains Justice, the Iowa Environmental Council, Physicians for Social Responsibility, Community Energy Solutions, the Iowa Renewable Energy Association and Iowa Interfaith Power and Light.  

I am still annoyed that the Iowa Utilities Board approved an application to build the Marshalltown plant last spring, but at least the IUB’s recent ratemaking decision helped doom the project.

Please disregard my action alert regarding public comments on the DNR’s draft air quality permit for the Marshalltown plant.

UPDATE: At Century of the Common Iowan, noneed4thneed points out that the coal plant would have created 85 permanent jobs as well as providing a lot of temporary jobs during its construction. I sympathize with people who are upset about losing those jobs. However, I do not support making a 50-year investment in the wrong direction on energy production, which would also result in more respiratory illness, mercury pollution and higher utility bills for thousands of Iowans, all for the sake of some jobs in the Marshalltown area.  

Continue Reading...

Alliant may walk away from the Marshalltown coal plant

On Wednesday the Iowa Utilities Board delivered a long-awaited ruling on “ratemaking principles” for the coal-fired power plant that Interstate Power and Light (a subsidiary of Alliant Energy) wants to build near Marshalltown. The ratemaking principles determine how much of a return the investor-owned utility can make on its investment. A higher return for the utility means the company can pass more of the cost of building a new plant onto customers.

The Iowa Utilities Board’s decision was well below what Alliant requested and not far above what the Iowa Consumer Advocate’s Office was seeking. The Cedar Rapids Gazette quoted an energy industry analyst:

“We expect LNT (Alliant Energy) will not accept the ratemaking principles as approved by the Iowa Utilities Board, instead allowing the proposal to die,” said David Parker of Robert W. Baird in Milwaukee. He said Alliant will probably look instead to building more wind and natural-gas electric turbines.

At Century of the Common Iowan, noneed4thneed links to an article from the Marshalltown Times-Republican that similarly suggested the future of the project is in doubt.

Alliant’s official statement left options open but made clear that the company was not happy with the ratemaking ruling. Excerpt:

In its decision, the IUB established a return on equity of 10.1 percent and a cost cap of $2816.00 per kilowatt, excluding AFUDC. IPL had requested a return on equity of 12.55 percent and a cost cap of $3483.00 per kilowatt, excluding AFUDC. IPL has proposed to own 350 megawatts of the facility’s output, with the remaining output owned by other partners or included in purchased power agreements.

“We will need to review the IUB’s written order to determine our next steps,” states Tom Aller, president-IPL. “However, the conditions placed by the IUB on the proposed hybrid power plant present a number of challenges in today’s financial climate, and we are disappointed that this decision seemingly does not take that reality into account. We will continue to work with our partners to determine how today’s decision will impact our respective companies’ long-term generation plans. IPL remains committed to pursuing safe, reliable, environmentally responsible and cost effective energy supply options to meet Iowa’s future energy needs.”

I would not be surprised if Alliant follows the lead of LS Power, which opted last month not to pursue a proposed coal-fired power plant near Waterloo. Alliant’s subsidiary in Wisconsin may ask state regulators to allow an emergency rate hike because the economic slump has reduced demand for electricity:

Utility executives said the increase would be needed to offset a dramatic decline in power sales because of the recession.

With the closing of the Janesville General Motors plant and other factory cutbacks, the utility is forecasting power sales to drop 6% this year.

“It is understandable that our customers find it frustrating that the economic hardships many of them are experiencing could in turn compel us to increase their electric bills,” said Patricia Kampling, the utility’s chief financial officer, during a conference call Thursday.

Think about that for a minute. All along Alliant and their boosters in Marshalltown have been telling us that a new coal-fired power plant is needed to meet increased electricity needs. But future demand is almost surely going to be below what they have projected.

We could reduce our baseload needs further with an aggressive energy efficiency policy.

While several analysts interpreted Wednesday’s ratemaking ruling as bad news for Alliant, it’s worth noting that Plains Justice had a different take:

“The Iowa Utilities Board has missed an important opportunity to protect our state’s economy and shield  Iowa consumers from a significant electricity rate increase,” said Carrie La Seur, President of Plains Justice.

“New coal power plant proposals are being canceled across the country because they cost too much and pose too many financial risks. The IUB has really let Iowans down by opting for an expensive, polluting coal plant instead of the available cheaper alternative of aggressive energy efficiency programs,” she added.

I put the full text of the Plains Justice release after the jump.

On a related note, Plains Justice passed along this news via e-mail a few days ago:

Last week, the Iowa Utilities Board (IUB) denied a petition to re-open the generating certificate proceedings for the proposed Marshalltown coal plant. The generating certificate grants permission for the power plant to be built.

A petition for re-hearing had been filed by the Iowa Office of Consumer Advocate and joined by Plains Justice on behalf of Community Energy Solutions, Iowa Environmental Council, Iowa Farmers Union, Iowa Physicians for Social Responsibility, and Iowa Renewable Energy Association (the Coalition). Now that the petition has been denied, the IUB’s decision to grant the generating certificate can be appealed in state court although it is not yet known whether anyone will appeal.

A lawsuit would only add to the delay and expense of building this power plant.

Meanwhile, the Iowa Department of Natural Resources is expected to issue a draft air permit for the Marshalltown plant very soon. Opponents of this 50-year investment in the wrong direction on energy will want to make their voices heard during the public comment period on that permit. Coal-fired power plants are a major source of fine-particulate matter pollution, which is linked to various respiratory illnesses.

Continue Reading...

Action: Demand more public input on coal plant in Marshalltown

This e-mail came from the Sierra Club Iowa Chapter today:

Take Action for Clean Energy

The draft air permit for Alliant Energy’s massive proposed coal-fired plant in Marshalltown could be released any day now. It is critical that all Iowans have a chance to participate in the permitting process and express concerns about public health and the threat to Iowa’s energy future posed by dirty fuels of the past like coal.

Tell Governor Culver and Iowa Department of Natural Resources Director Richard Leopold that more public hearings should be held, and the comment period should be extended to 90 days.

Click here to take action:  http://action.sierraclub.org/e…

Alliant’s proposed 642 megawatt coal plant would emit tons of harmful soot and smog forming pollution linked to serious respiratory and heart problems.  It would also spew roughly 6,000,000 tons per year of carbon dioxide into the atmosphere.  This is a statewide debate about the air we breathe and the energy choices we make-all concerned Iowans should have the opportunity to make their voices heard.

We need clean energy solutions in Iowa that will create jobs and foster the growth of our economy, not pollute our air for decades.

Please take action now and help us demand a cleaner energy future!

In hope and enthusiasm,

Neila Seaman

Director

Sierra Club, Iowa Chapter

3839 Merle Hay Road, Suite 280

Des Moines, IA 50310

neila.seaman@sierraclub.org

515-277-8868

http://www.iowa.sierraclub.org/

Clicking the above links will take you to a page where you can send a message to Governor Culver and DNR director Leopold. You can use the message the Sierra Club has drafted, or personalize your message as desired.

Click here to read a Sierra Club fact sheet on how burning coal adversely affects the environment and public health. Those facts and figures may be useful for your message to Culver and Leopold.

Extending the public comment period on an air quality permit may seem like no big deal, but the longer that this process takes, and the more Iowans who weigh in, the better the chance that Alliant will walk away from this project. Earlier this week LS Power announced that it would no longer try to build a coal-fired power plant near Waterloo, citing market conditions and lower future projected electricity demand.

Continue Reading...

Yes, the Waterloo coal plant is dead

On Saturday I asked whether the proposed coal-fired power plant near Waterloo was dead now that Dynegy has pulled out of a joint venture with LS Power and Associates.

I am pleased to bring you the answer to the question:

LS POWER AFFILIATE WILL FOREGO FURTHER DEVELOPMENT OF ELK RUN ENERGY STATION

01/06/2009

WATERLOO, IOWA (January 6, 2009) – LS Power affiliate, Elk Run Energy Associates, LLC, announced today that it will forego further development of the Elk Run Energy Station in Waterloo, Iowa.

Given the slowing load growth in the region due to the current downturn in the U.S. economy, and the fact that LS Power has more advanced projects under development in the region that could serve the same need, the Company will redirect its development efforts to other projects.

“Elk Run Energy has been a proud member of the Greater Cedar Valley community, and appreciates the unwavering support of so many individuals and organizations throughout the development process,” said Mark Milburn, Assistant Vice President of LS Power.

LS Power continues to develop a portfolio of coal, natural gas, wind and solar generation facilities and transmission projects with ongoing development activities in Arkansas, Arizona, Georgia, Michigan, Nevada, New Jersey, Texas, Virginia and other locations.

Did you catch that bit about “slowing load growth” in the region? That means that future electricity usage is projected to be lower than previously thought, because of the current recession. People are tightening their belts, and conserving energy is a good way to save money. We could do even more on this front with aggressive state or federal policies on energy efficiency.

Thanks again to all the environmental and community advocates who helped doom the Elk Run project. One coal-fired power plant down, one to go.

Will Alliant and its subsidiary IPL keep trying to build a new coal plant near Marshalltown? I don’t know, but it’s worth noting that Dynegy’s stock went up 19 percent the day they withdrew from the joint venture on developing new coal plants. Alliant’s stock price could use a shot in the arm right now.

Continue Reading...

Is the Waterloo coal plant dead?

The Houston Chronicle reported on January 2:

Stingy credit markets and high regulatory hurdles have spurred Houston-based Dynegy to step back from new coal-fired power plant projects by ending a joint venture with LS Power Associates.

Dynegy will keep the right to expand its 27 existing coal, natural gas and oil-fired plants in 13 states, and it retains stakes in a pair of Texas and Arkansas coal projects.

But Dynegy will pay New York-based LS Power $19 million as part of the split and let it take full ownership of new projects under consideration in Arkansas, Georgia, Iowa, Michigan and Nevada.

Shares of Dynegy closed up 38 cents, or 19 percent, to $2.38 on Friday.

Dynegy Chairman and CEO Bruce Williamson said the power plant development landscape has changed since the company entered into the joint venture with LS in the fall of 2006. Funding new projects is much more difficult given the worldwide credit crunch and the possibility of new climate change legislation under the Obama administration.

“In light of these market circumstances, Dynegy has elected to focus development activities and investments around our own portfolio where we control the option to develop and can manage the costs being incurred more closely,” Williamson said in a statement.

Here is the Waterloo-Cedar Falls Courier’s take on the story:

The future of a proposed coal-fired power plant near Waterloo became a little cloudier Friday when Texas-based Dynegy Inc. announced that it and New Jersey-based LS Power Associates were dissolving their joint venture to develop that plant and others in several states.

The move transfers to LS Power full ownership and developmental rights associated with various “greenfield” projects in several states, including the 750-megawatt Elk Run Energy Station proposed for construction northeast of Waterloo.

[…]

Separation from Dynegy puts the Elk Run plans in doubt, said Don Shatzer, a member of Community Energy Solutions, which opposes the Elk Run Energy project.

“LS Power has no experience developing/operating coal plants and so is unlikely to proceed (without) a new partner,” Shatzer said in an e-mail note.

Bruce Nilles, director of the Sierra Club’s National Coal Campaign, shares Shatzer’s opinion, according to The Houston Chronicle.

This sounds quite promising, although neither the Houston Chronicle nor the Waterloo-Cedar Falls Courier were able to get a comment from LS Power on whether it will continue to pursue this project.

Incidentally, the Waterloo plant is not needed to meet Iowa’s energy demand; most of the electricity the plant would have generated would have gone out of state.

Many thanks to all those who have worked hard to prevent this plant from being built, notably the Waterloo-based grassroots organization Community Energy Solutions, the Sierra Club Iowa chapter, Plains Justice of Cedar Rapids, and the Iowa Environmental Council (with which I am involved).

Well-organized activists helped prevented LS Power from annexing some farmland for the coal-fired plant.

In March 2008, the Iowa Department of Natural Resources denied a construction permit for the project. Apparently the county zoning for that land was not in order, so the DNR concluded that LS Power “hadn’t met our requirement to have the full ability to put the power plant on that property.”

These small victories were not themselves enough to kill the project. However, the setbacks delayed the process until “external credit and regulatory factors that make development much more uncertain” prompted Dynegy to walk away.

Lesson for environmental activists: it is worth exercising every legal option to put up obstacles to a bad project.

Lesson for Alliant, which wants to build a new coal-fired power plant near Marshalltown: Dynegy’s stock shot up 19 percent in one day after they pulled out of the joint venture with LS Power. The market favors abandoning new coal projects. Dropping your plans to build a power plant near Marshalltown would not only be good for public health and the environment, it could boost your stock price.

Continue Reading...
View More...