Nevada zigged while everyone else zagged.
Our Legislature passed and Gov. Brian Sandoval signed into law Senate Bill 123, which requires NV Energy to prematurely close perfectly good, reliable, acceptably clean and inexpensive coal-fired power plants and mandates that ratepayers pick up every dime of the cost of tearing down the plants, cleaning up the sites, canceling years worth of contracts and even the cost of the unused coal left lying about.
All the power capacity once provided by coal-fire plants would then be replaced by construction of hundreds of megawatts of new natural gas-fired and renewable generation — such as solar and wind.
A funny thing happened on the way to Utopia.
While the price of natural gas fell from $9.26 per thousand cubic feet in 2008 to $3.52 in 2012 and sparked a rush to build gas-fired power plants, the price of natural gas has increased 78 percent from March 2012 to March of this year. Meanwhile, the price of coal dropped four cents per million Btus. Because of this price fluctuation, electrical power generation with coal went up 13 percent, in the first quarter, while power generated with natural gas dropped 8 percent.
According to the U.S. Energy Information Administration, this year the price of fuel for power generation is $2.36 per million Btus from coal and $4.65 for the same generating capacity from natural gas. The cost of renewables is several times higher due to capital costs, though the price of fuel is nil.
Fuel costs in Nevada are passed on directly to the consumer.
At one point NV Energy officials predicted their plan to switch from coal to natural gas and renewables, cutely labeled NVision, would add no more than 4 percent to power bills over the next 20 years. Instead of rising by 32 percent under current plans, rates would climb 36 percent, plus inflation. It is unclear whether that figure took into account the 78 percent spike in gas prices.
Public Utilities Commission staff adviser Anne-Marie Cuneo said the plan would keep rates down in the short-term but would load higher costs at the end. “Your kids will end up paying for electricity that you used nine to 10 years ago, with interest,” Cuneo said.
Ostensibly the shuttering of coal-fired plants is so that Nevada power customers can do their part to save the planet from global warming or climate change or extreme weather or whatever it is called this week, but realistically power company executives probably believe President Obama will make good on his 2008 campaign promise: “If somebody wants to build a coal-fired power plant, they can. It’s just that it will bankrupt them.… Under my plan … electricity rates would necessarily skyrocket.”
In a speech in Germany this past week, Obama touched on climate change, saying, “For the grim alternative affects all nations — more severe storms, more famine and floods, new waves of refugees, coastlines that vanish, oceans that rise. This is the future we must avert. This is the global threat of our time. And for the sake of future generations, our generation must move toward a global compact to confront a changing climate before it is too late. That is our job. That is our task. We have to get to work.”
The administration is behind schedule in finishing EPA emissions rules that would effectively ban new coal-fired plants using current technology. In a speech on Tuesday, Obama said he is unilaterally pressing forward on those rules and existing coal plants would be affected, too.
A funny thing happened on the way to the Apocalypse.
According to a New York Times article recently, the rise in the temperature of the planet has been markedly slower during the past 15 years than the 20 years before that, even though greenhouse gases have poured into the air at a record pace.
“The slowdown is a bit of a mystery to climate scientists,” the Times conceded. Their models did not predict this and cannot explain it, but don’t dare question the models.
While most of us see windmills, the Obamas and Harry Reids of this world see giants, which they “mean to engage in battle and slay, and with whose spoils we shall begin to make our fortunes; for this is righteous warfare, and it is God’s good service to sweep so evil a breed from off the face of the earth,” as Don Quixote vowed to Sancho Panza, not letting inconvenient facts deter.
Can someone please explain why Nevadans must pay handsomely for decades to come to prevent something that isn’t happening?
Thomas Mitchell is a longtime Nevada newspaper columnist. You may email him at firstname.lastname@example.org. Read additional musings on his blog at http://4thst8.