URP 337 Planning public infrastructure

Week 62 May 2011

EnergyUtilities

Sometimes energy-related infrastructure represents a land

use

Why else should planners care?

Energy Utilities

As consumer advocates.

As advocates for the

environment.

Yucca Mountain Nevada will it not be used to store nuclear waste. Where will it go?

As advocates for those with less privilege.

http://www.eia.doe.gov/emeu/aer/pecss_diagram.html

Infrastructure for the provision of energy has many planning dimensions

(Especially in fuel storage)

Consider gasoline…

Photo in Longstreth, fig 10: Foy’s service station, 211 N Figueroa, Los Angeles, 1928.

Photo in Longstreth, fig 30: Texaco “type C,” probably west coast, 1937.

Big oil and the monkey wrench entrepreneur

Photo from Violence Policy Center, “Sitting Ducks: The Threat to the Chemical and Refinery Industry From 50 Caliber

Sniper Rifles.”: http://www.vpc.org/studies/ducktwo.htm

Gasoline distribution today

Photo from SPROL: “worst places in the world”

http://www.sprol.com/

Gasoline distribution: NJ tank farm

LA tank farm

Tank farmSource: image provided by Chevron. Downloaded from:

http://tonto.eia.doe.gov/kids/energy.cfm?page=oil_home-basics

Source: image provided by Argonne National Laboratory. Downloaded from:http://www.energy.ca.gov/2009_energypolicy/documents/2009-08-24_workshop/presentations/

08_CEC_Schremp_Imports_and_Pipeline_Exports.pdfSource

Petroleum pipelines to and from CA

http://www.energy.ca.gov/reports/2003-09-09_600-03-014F.PDF

http://www.energy.ca.gov/fuels/pipeline/documents/Fig1_Major_Refined_Pipeline.PDF

Natural gas, too

U.S. Natural Gas Supply Basins Relative to Major Natural Gas Pipeline Transportation Corridors, 2008

Major Changes in Natural Gas Pipeline Transportation Capacity, 1998-2008 http://www.eia.doe.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/comparemapm.pps

Electricity

“Electricity is special because it cannot be

stored”

(it still involves land uses)

neither can fire!

1.Micro economics, in this case looking at potentials for monopolies. Also looking at notion of “non-redeployable investment.”

2.Inventory of stakeholders and their interests and for institutional change.

3.A look at the technological landscape and its inter-relationships with environmental goals and price elasticities of fuels.

Recall: Three sorts of “snapshots” for analyzing infrastructure “events”:

1.By what process(es) was it constituted and is it sustained?

2.Where do opportunities for change lie within those processes?

3.Is a better infrastructure outcome imaginable? If so, can it be realized by exploiting the opportunities for change that have been identified?

Recall: Three questions to guide inquiries of infrastructure:

By what process(es)

was it constituted

and is it sustained?

dateline 1922

Schematic of infrastructure for electricity

Figure source: http://www.eia.doe.gov/basics/electricity_basics.html

generation transmission distribution

deregulation was

limited to

natural monopolie

s

Schematic of infrastructure for electricity

Figure source: http://www.eia.doe.gov/basics/electricity_basics.html

generation transmission distribution

On-site generation technologies may reduce the importance of these

pieces

Energy supply

• Structure of industry• Three components:

– Generation– Transmission– Distribution

• Legislation

ghu took outghu put in

net purchase

Generation

generic thermal generatorwww.eia.doe.gov/cneaf/electricity/chg_stru_update/fig3a.html

Schematic of Gas Turbine www.eia.doe.gov/cneaf/electricity/chg_stru_update/fig3b.html

Schematic of Combined Cycle www.eia.doe.gov/cneaf/electricity/chg_stru_update/fig3b.html

Cogeneration Schematic www.eia.doe.gov/cneaf/electricity/chg_stru_update/fig3b.html

U.S. Electric Power Industry Net Generation,

2009

Source:Figure ES1 http://www.eia.doe.gov/cneaf/elec

tricity/epa/epa_sum.html

large icons ~ 10 GW of capacity, not individual plants, in a regional area for each fuel source. smaller icons ~ 5 GW capacity.

Source:http://www.eia.doe.gov/cneaf/electricity/chg_stru_update/fig5.html

see also:http://

www.eia.doe.gov

/state/

http://www.eia.doe.gov/state/state-energy-profiles.cfm?sid=CA

Source:http://www.eia.doe.gov/cneaf/

electricity/chg_stru_update/fig6.html

Transmission Ownership in the United States

NERC regions

http://www.eia.doe.gov/cneaf/electricity/chg_str_fuel/html/fig02.html

North American Electric Reliability Council

Geographic reliability

IOU=Investor owned utilityFeds=Fed gov’tOther=municipal utilities & moreCo-ops=non-profit cooperative utilities

Comparison of 750 kWh per month bill (CA avg)

California Utilities

Roseville Electric $66.50

SMUD $71.81 (incl. prop. 6% inc)

L.A. Dept. of Water & Power

$78.11

Southern California Edison $105.68

PG&E $93.01

San Diego Gas & Electric $105.90

Does municipal vs IOU make a difference?

CA’s largest IOUs

Plant name County Company operating Primary Fuel

MWHr

ALAMITOS CA LOS ANGELES AES Southland LLC-Alamitos

NG 2,954,395

Elk Hills Power CA Kern Elk Hills Power NG 3,979,415

ENCINA CA SAN DIEGO Dynegy Power NG 3,099,059

HAYNES GEN STATION CA LOS ANGELES Los Angeles (City of) NG 2,046,335

High Desert Power Pr CA San Bernardino High Desert Power Project NG 3,785,083

La Paloma Generating CA Kern La Paloma Generating NG 5,630,210

Los Medanos Energy C CA Contra Costa Calpine Corporation NG 3,690,627

MOSS LANDING CA MONTEREY Duke Energy Moss Landing NG 6,440,119

ORMOND BEACH CA VENTURA Reliant Energy Power Gen Inc - Coolwater

NG 2,248,643

South Point Energy C CA Mohave Calpine South Point Power Plant

NG 2,909,039

Sunrise Power Compan CA Kern Sunrise Power NG 3,193,961

Sutter Energy Center CA Sutter Calpine Corp-Sutter NG 3,427,336

Source: Environmental Integrity Project (May 2005). Dirty Kilowatts: America’s most polluting power plants. http://www.environmentalintegrity.org/

CA has relatively clean energy

California’s energy is clean because relatively little coal is used in its generation

No CA plants are on this graph

0 5,000 10,000 15,000 20,000 25,0000

200

400

600

800

1,000

1,200

1,400

1,600

f(x) = 0.0378749112770846 x + 22.8676478501896R² = 0.415155785203092

Mercury pollution in 2008, 260 large plants that reported Hg emissions in 2008.

Electric Generation (GWh) Electric Generation (GWh) Electric Generation (GWh)

Source: Environmental Integrity Project (March 2010). Dirty Kilowatts: America’s most polluting power plants. http://www.environmentalintegrity.org/news_reports/documents/DirtyKilowatts-Top50MercuryPowerPlantReport.pdf

notes on COAL for twenty-something

Californians

NASA imageshttp://earthobservatory.nasa.gov/NaturalHazards/view.php?id=36352

American News Project Videohttp://www.environmentalintegrity.org/index.php

EPA cleanup web sitehttp://www.epakingstontva.com/nature_extent.aspx

TVA Coal-fired power plant accident, 22 Dec 2008 atTennessee’s Kingston Fossil Plant

Energy utilities

• Deliver energy to customers in homes, offices, shops, etc

• Sell electricity, natural gas, oil, coal, and other energy sources

• Include public and private sector suppliers– private sector suppliers include investor-owned as

well as privately held

Distribution of consumption by sector, 2008/9

Data source: http://www.eia.doe.gov/cneaf/electricity/epa/epat7p2.htmlhttp://www.eia.doe.gov/cneaf/electricity/st_profiles/california.html

CA (2008) US( 2009)0

20

40

60

80

100

Transportation

Industrial

Commercial

Residential

Revenue by Sector1993-2004 in $millions

Residential

Commercial

Industrial

$0

$50,000

$100,000

$150,000

$200,000

$250,000

1993 1995 1997 1999 2001 2003Data source: http://www.eia.doe.gov/cneaf/electricity/

Energy Consumption by Sector

in quadrillion Btu

Data source: Annual Energy Outlook 2008 with Projections to 2030

http://www.eia.doe.gov/oiaf/aeo/index.html

0

5

10

15

20

25

30

35

2005 2010 2015 2020 2025 2030

Commercial Industrial 4/

Transportation Residential

0.010.020.030.040.050.060.070.080.090.0

1949 1954 1959 1964 1969 1974 1979 1984 1989 1994

Renewable energy

Nuclear electric power

Fossil fuels

Consumed energy, in quadrillion BTUs

Source:Statistical Abstract of the U.S., 1997, Table 921.

0

20

40

60

80

100

120

2003 2007 2011 2015 2019 2023 2027

0

200

400

600

800

1000

1200

1400

Commercial and Industrial Generators

renewables

Total Electric Power Sector Capacity

nuclear

Electric generation capacity, selected sourcess

in gigawatts

Data source: Annual Energy Outlook 2006 with Projections to 2030

http://www.eia.doe.gov/oiaf/aeo/index.html

totalsources

0

20

40

60

80

100

120

140

160

180

200

1990 1992 1994 1996 1998 2000 2002 2004

%nat gas +%nuke +%hydro +%renewables

millions of MWhrs

California electric power fuel sources, 1990-2005data source:http://w w w .eia.doe.gov/cneaf/electricity/epa/epa_sprdshts.html

residential price per kWh in

2005. Source: http://www.eia.doe.gov/cneaf/electricity/epa/fig7p5.html

residential price per kWh in

2006. Source: http://www.eia.doe.gov/cneaf/electricity/epa/fig7p5.html

residential price per kWh in

2008. Source: http://www.eia.doe.gov/cneaf/electricity/epa/fig7p5.html

residential price per kWh in

2009. Source: http://www.eia.doe.gov/cneaf/electricity/epa/fig7p5.html

1997 1999 2001 2003 2005 20070

2

4

6

8

10

Residential Commercial Industrial Transportation & Other

Average Retail Price of Electricity to Ultimate Customers by End-Use Sector , 1997-2007 (current

dollars)

Data source: http://www.eia.doe.gov/cneaf/electricity/epa/epat7p4.html

Regulation: PUHCA(1)limits the geographic spread (therefore,

size) of utility holding companies, the kinds of business they may enter, the number of holding companies over a utility in a corporate heirarchy, and their capital structure;

(2) controls the amount of debt (thus, cost of capital), dividends, loans and guarantees based on utility subsidiaries (so the parents can’t loot or bankrupt the utility subsidiary), and the securities that parent companies may issue;

Regulation: PUHCA(3) regulates self-dealing among affiliate

companies and cross-subsidies of unregulated businesses by regulated businesses;

(4) controls acquisitions of other utilities and other businesses; and,

(5) limits common ownership of both electric and natural gas utilities.

Lynn Hargis (September 2003) PUHCA FOR DUMMIES: An Electricity Blackout and Energy Bill Primer

deregulation 1999

Interactive version:http://www.eia.doe.gov/cneaf/electricity/page/restructuring/

restructure_elect.html

Status of State Electric Industry Restructuring Activity

-- as of February 2010 --

Sept. 14, 2000 Sue: This is the time of year when government affairs has to prove how valuable it is to Ken Lay and Jeff Skilling . . . . Do you know when you started overscheduling load and making buckets of

money on that?"

Overscheduling load — a tactic that Enron traders famously dubbed "Fat Boy" — involved purposely overstating how much electricity would be needed in the future, creating the appearance of power shortages and leading to

inflated prices.

Susan J. Mara, Enron's California director of regulatory affairs

until December 2001

Sept. 14, 2000

Tim: "Well he [Jeffrey S. Richter] makes … between one and two [million] a day, which never shows up on any curve shift…. He steals money from California to the tune of about a million — "

Tim: "OK…he, um, he arbitrages the California market to the tune of a million

bucks or two a day."

Timothy N. BeldenEnron's West Coast trading chief

Unknown voice: “Could you rephrase that?"

Consolidation of industryBetween 1986-1998, 39 electric IOUs merged with other utilities in the industry.

Diversification of industry

Employment in industry

Legislation

• The Public Utility Regulatory Policies Act of 1978 (PURPA) stipulated that electric utilities had to interconnect with and buy, at the utilities' avoided cost, capacity and energy offered by any nonutility facility meeting certain criteria established by the Federal Energy Regulatory Commission (FERC).

Legislation• In 1996, FERC issued Order 888 which

opened transmission access to non- utilities, thereby establishing wholesale competition, and

• Order 889 which requires utilities to establish electronic systems to share information about available transmission capacity.

Order 888 on stranded costs

• Recovery of stranded costs is perhaps the most contentious issue confronting regulators in promoting competition. Stranded costs (or assets) are costs that have been prudently incurred by utilities to serve their customers but cannot be recovered if the consumers choose other electricity suppliers.

• One study has estimated current stranded assets at $88 billion, and estimates of projected stranded costs range from $10 billion to $500 billion.

Legislation• The Energy Policy Act of 1992 (EPACT)

opened access to transmission networks and exempted certain nonutilities from the restrictions of the Public Utility Holding Company Act of 1935 (PUHCA)

• Energy Policy Act of 2005 (555 pages) CBO Summary of the Energy Policy Act of 2005

• Left open the possibility of opening the Arctic National Wildlife Refuge in Alaska to oil and gas drilling.

• Suspended federal royalty payments five years for drilling in Gulf of Mexico deep water of more than 400 meters.

• Requires the designation of corridors for oil, gas, and hydrogen pipelines and electricity transmission and distribution corridors on Federal land in certain contiguous Western States and on Federal land in States other than the contiguous Western States (ie. the East and HI and AK)

   

OIL/GAS

Photo source: U.S. Fish and Wildlife Service. See http://www.savearcticrefuge.org/sections/photo.html

• Limits product liability for makers of methyl tertiary butyl ether (MTBE), a fuel additive and suspected carcinogen that has fouled groundwater in cities across the nation.

• Bans MTBE use by 2014 and gives more than $3.8 billion in transition aid for MTBE makers to switch to other products.

• renewable fuels standard -- 7.5 billion gallons of ethanol (made from corn) and other renewable-based fuel to the nation's supply of gasoline by 2012

• Cuts number of special gasoline blends now required to ease air pollution in cities and regions.

• Offers subsidies to build new ethanol production plants.

FUEL/TRANSPORTATION

• Extends expiring accident insurance protection for owners of nuclear power plants by 20 years.

• Spends $1.3 billion for experimental Idaho reactor that would also produce hydrogen fuel.

NUCLEAR ENERGY

• Sets mandatory reliability standards for the electric power grid to prevent a repeat of the August 2003 blackout that left 50 million people in the dark.

• Offers financial incentives to generate more electricity from solar, wind, biomass and geothermal sources.

ELECTRICITY

• Extends annual US daylight-saving time by two months to cut energy use.

• Extends deadline for cities downwind of polluting factories to comply with smog standards if states can prove that most pollution comes from outside their borders.

• Requires 20 percent cut in federal buildings' energy use by 2015.

• Authorizes more than $3 billion annually to help poor families pay winter heating bills.

MISCELLANEOUS

Source: Reuters News Service, 22 April 2005.

References• California Solar initiative (jan 2006)

– Press release:http://www.cpuc.ca.gov/word_pdf/NEWS_RELEASE/52745.pdf– Fact sheet:

http://www.cpuc.ca.gov/static/energy/solar/california_solar_initiative_-_fact_sheet.pdf• Energy Information Administration of DOE

– Quick facts:http://www.eia.doe.gov/neic/quickfacts/quickelectric.html– 2008 Energy Outlook: http://www.eia.doe.gov/oiaf/aeo/index.html– Monthly Energy Review: http://www.eia.doe.gov/emeu/mer/contents.html

• Laws– Public Utility Holding Company Act of 1935:

http://www.eia.doe.gov/oil_gas/natural_gas/analysis_publications/ngmajorleg/pubutility.html– Energy Policy Act of 2005: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?

dbname=109_cong_public_laws&docid=f:publ058.109• Resources to help understand the EPA of 2005:

http://www.energy.wsu.edu/ftp-ep/pubs/library/EnergyPolicyAnalysis.pdf