Clean Energy Springfield

In this post, I'm going to report a little bit about the questions asked by the aldermen in last week's committee meeting, because I think it's useful and kind of fascinating. I basically actually kind of enjoy their discussions. They take on a certain kind of performance art to me. Anyway, this is the last post about the committee meeting, unless other questions come up.

Chairman McNeil, Vice-chair Selinger, and committee aldermen Edwards, Kunz, Bartolomucci were there, as well as aldermen Strom and Yeager, who are not on this committee. Selinger, Bartolomucci, and Yeager did not, that I noted, ask any questions. McNeil only asked a few, Strom asked a few more, and Edwards and Kunz, as mentioned last night, were pretty aggressive in asking what seemed like mostly fair questions (which were sometimes rooted in misunderstandings).

I'm not going to cover every question, just going to hit a few that got the most discussion.

Early on, Edwards asked about the energy escalation rate. Specifically, he wanted to know what "our" escalation rate has been recently. Jay Bartlett said that it had been about 9% over the past 10 years. Kunz jumped in to clarify that Edwards and Bartlett were referring to different things. Edwards was asking about Springfield rates, which are set by city council, whereas Bartlett was talking about prices on the market. (Technically, I think, CWLP has to sell all of its power to the market, and then buy it back. This is costless, since we're selling to ourselves, but it means that they pay attention to those market rates, in addition to any time that they have to buy from the market because of plant down time.) There followed (and occurred again later) discussion of what would happen if the energy inflation rate were higher or lower than expected: higher means more revenue for the city and a negative fuel adjustment charge for ratepayers; lower means that CWLP has to cover the gap in some way. If it happens after Dallman IV (the new coal plant) comes online, any excess revenue from sales of excess generation to the market can cover it; if it happens before Dallman IV comes online (or if for some reason Dallman IV revenues can't cover it), the result will mean higher rates.

Second, McNeil asked why CWLP was proposing to start its purchase now. This was addressed again later when Kunz was confused by one of CWLP's charts, which showed revenue to the city in parentheses and red font, and costs to the city in black, which is the reverse of how you'd normally show it. This confused me, too--CWLP: if you're reading, don't do that; and also: the y-axes on all of your charts should be at zero: your chart of CO2 emissions for in-city electricity sales makes it look like we're cutting CO2 in half, when that's not nearly the case.

Anyway: the question about why CWLP wants to start now. First, apparently, the Hancock County energy comes at a good price. It's not broken out by Hancock versus Osceola, so I'm taking their word on that. Second, increasing demand for carbon-free electricity is driving wind prices up, along with wait times for building wind farms, so waiting longer will be more costly and take longer. Kunz asked why CWLP was presenting the two contracts separately, since they're interdependent. Bartlett said that they finished this one first, and figured there was no point in sitting on it. Also, he said they were getting a lot of requests to find out when the contracts would be ready. In particular, he mentioned that the State has started making CO2 reduction commitments, so they are eager for CWLP's wind power to come online, to show they're making progress.

Third, Strom asked whether the price in the next contract was already negotiated, and what it was. Bartlett said yes, and that it's the same price structure as this contract. Strom also asked when the second contract would start. Bartlett said that it would start when the Osceola farm came online, which is expected to be January 1, 2008. I didn't catch it, but Will said that someone said FPL is running ahead of schedule on that.

Fourth, there was some misunderstanding about the nature of our wind power commitment, asking whether we'd be in trouble if the wind didn't blow or, in the alternative, if our commitment could be filled early if the wind is particularly strong. Bartlett made clear that we've committed to the capacity, and we get whatever it generates.

Fifth, one point that CWLP's slide show contained was that FPL guaranteed an average of 90% uptime over a rolling 24-month period. So, if the wind turbines that we're licensing are down more than 90% of the time, FPL will pay a penalty to CWLP. Kunz asked whether CWLP put this in because they wanted to make money or because the Sierra Club required. Bartlett said that we want what the wind power provides (carbon reductions and protection from price fluctuations), so they wanted to make sure that CWLP got those.

Those were the biggest questions, according to my notes. Overall, I think these were good questions. It's clear that Kunz and Edwards don't want to do anything more than they have to, but I think their questions also reflected a concern for ratepayers. Personally, I'd prefer that concern be leavened with a little more foresight about the future and comprehensive view of CWLP's role. But Kunz, in particular, seems to be almost maniacally dedicated to what his constituents want, and you can't blame him too much for that.