David Hewitt’s Recent Comments

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  a case in point?

  I would offer what I hope is an appropriate case in point.  Here in SE Wisconsin our local IOU is preparing to bring two new conventional coal plants online next year.  Early in the permitting process, the state regulatory body (Public Service Commission) approved the two conventional plants for the site, but nixed the third, an advanced technology coal gasification plant, saying it would cost too much.  The IOU sited the two new plants on the shore of Lake Michigan on the same site as an old (still operating) coal plant.  They did an end-run around the Clean Air Act rules, saying because the new plants are on the same site, the new plants constitute a grandfather-able upgrade.  All relevant regulators agreed to that idea.  Recently, the final permits were up for review for the cooling system.  The cooling system will draw approximately 2 billion gallons of water daily from Lake Michigan, and return it about 10 degrees warmer.  Concerned about the effect on the natural environment, opponents argued that they could have built cooling towers.  But because of the Great Lakes Compact's restrictions on diverting water from the Great Lakes basin, the IOU argued that their proposal is superior to cooling towers, which would divert Lake Michigan water into the atmosphere.

  From all this we may conclude that the current regulatory structure in Wisconsin seeks to provide the lowest-cost electricity to the rate payers.  Waste one third of the heat generated by dumping it into the natural environment?  Doesn't matter.  

  I admit I'm struggling to understand parts of your re-regulation proposal.  Thinking about our local situation one day, I searched online for "electric utility heat exchanger" and found you.  Could a company like RED build a closed loop heat exchanger near our IOU's site to use the waste heat to generate electricity under your proposal and be profitable?  

  A more efficient design of these two new plants could have incorporated a closed loop heat exchanger from the start (if I correctly understand your writing), although the cost to rate payers would have been higher due to the increased cost at the outset.  In our current regulatory scheme, even if that had been proposed (it was not, as far as I know), it would have been vetoed by the PSC as too costly, just like the coal gasification proposal.  But if the market could provide a way to do it, we could get to where we as a society want to go.  If there are any regulatory barriers to an independent company doing what the IOU could have done in the first place, those barriers should be eliminated.

  The benefits to society would include that Lake Michigan water temperature would not rise artificially; we would burn significantly less coal to generate the same amount of electricity; the cost to rate payers might go down due to the efficiency increase; the IOU is not injured as their sunk costs and financial commitments would go forth on schedule.

  We're looking for the best balance between regulation and market forces.  We don't want to de-regulate, we want to re-regulate or restructure.  I know what outcome I want:  to stop "smoking" -- stop dumping GHG into the environment.  I'm starting to be persuaded that we should not make laws that incentivize a particular technology.  If somebody could profitably generate electricity from the waste heat (or use the waste heat to economical advantage), then I would only wish for the law to stay out of the way to allow that capital investment -- as long as it doesn't veer off the path toward the smokeless atmosphere.

  If I'm completely wrong-headed I apologize and I'll go back to reading silently.On A simple regulatory fix to the coming power crisis posted 1 year, 3 months ago 12 Responses