Barnett Shale

Duke Power CEO says fracking is transforming utilities, cutting CO2

James Rogers, the longtime chairman of North Carolina-based Duke Power, said environmentalists should make their peace with natural gas and hydraulic fracturing because of its contributions to dramatic cuts in carbon dioxide emissions from power generation. Rogers said the substitution of natural gas-fired generation for coal-fired power plants has lowered U.S. CO2 emissions to 1990 levels and to 1960's levels on a per-capita basis. "Natural gas is transforming our industry," Rogers told an audience at the IHS CeraWeek energy conference in Houston. Natural gas production can be done responsibly and its contribution to lower carbon and other emissions outweigh concerns about natural gas' possible impacts on water and air in areas where it is produced.

-- Jim Fuquay

Texas sets another wind power record

The Electric Reliability Council of Texas, operator of the state's biggest power grid, said last week's cold front blew in more than snow and ice. "The high winds that sent a chill through Texas last week also contributed to a new wind power record, with wind generation providing 8,638 MW (megawatts) of power at 3:11 p.m. on Dec. 25," ERCOT announced today.  That was nearly 26 percent of demand at he time. "This new record is 117 MW higher than the previous 8,521 MW record set on Nov. 10," ERCOT said. "ERCOT has more than 10,000 MW of wind power capacity, with more than 20,000 MW of additional wind generation under review."

ERCOT said more than 6,600 megawatts came from wind farms in West Texas and more than 1,600 megawatts from the Texas Coast.

-- Jim Fuquay

Two views on what's killing coal

The good folks at the Sierra Club issued a news release Thursday trumpeting the decline of coal in the past year and attributing it to "an unprecedented coalition including Sierra Club and more than a hundred local, regional and national organizations." There are some interesting numbers, but as far as what's driving the change, the Energy Information Administration at the U.S. DOE, and National Public Radio, and the San Francisco Chronicle, and The Wall Street Journal, and the Houston Chronicle, with a more nuanced version, offer a different interpretation. But their answers basically come down to two words: natural gas. Make that three words: cheap natural gas.

A link to the EIA's report is here. NPR's print version is here. The San Francisco Chronicle's story is here, and the Houston Chronicle's report is here. The Wall Street Journal's pay wall will likely catch nonsubscribers, but the link is here.

-- Jim Fuquay

Texas wind power hits record output -- and subsidy

The state's biggest power grid says electricity provided by wind farms hit a record at 10:21 a.m. Nov. 10, when 8,521 megawatts made it to transmission lines. Lest the achievement draw uncritical cheers, however, along come the free-marketers at the Texas Public Policy Foundation in Austin to point out that big wind means big taxpayer subsidies.

According to the Electric Reliability Council of Texas, which serves most of the state, wind power at its peak on Nov. 10, a Saturday, accounted for 25.9 percent of all electricity demand, which was at a relatively low 36,423 megawatts. The Wind Coalition, an industry group, also notes that wind power topped 6,800 megawatts the entire day and capped a three-day run that saw wind power remain near or above 5,000 megawatts. The previous record for wind power to the grid was 8,368 megawatts, hit on June 19 and again Nov. 9, the coalition said. As a percentage of electricity demand on ERCOT, the Nov. 10 share was just about triple wind's typical share, which was 8.5 percent for all of 2011, according to ERCOT data.

The Texas Public Policy Foundation sees another number: $22, as in the federal production tax credit for every megawatt-hour of wind power put on the grid. That means for, say, that three-day run when wind topped 5,000 megawatts, wind drew at least $7.92 million in subsidy (72 hours x 5,000 megawatts x $22 per megawatt-hour). In their November report, researchers Bill Peacock and Josiah Neeley figure wind's federal production tax credit in Texas at $597 million last year alone, even after accounting for the PTC's 10-year limit. Using past figures and making projections for future years, the report comes up with more than $4 billion in wind subsidies for the 10-year period from 2006 to 2015.

-- Jim Fuquay 

Editor's note: Since there have been some interesting comments on this, here's a link to the March 2012 report by the Congressional Budget Office on federal energy subsidies. The Star-Telegram also published a rebuttal from the American Wind Energy Association on Nov. 28, which likewise has drawn a number of comments. A link to that item is here.

Natural gas beats lignite in water use, study says

Using natural gas to generate electricity uses only about 60 percent of the water used to generate the same amount of power from burning Texas lignite, a low-grade coal, according to a study this week by the Webber Energy Group at the University of Texas at Austin. Here's one report on the study, an abstract of which is here.

-- Jim Fuquay

Shop local (the electricity version)

Direct Energy, one of the state's many retail electric providers in the deregulated market, has one it calls a first: electricity generated only with Texas natural gas. The True Blue Texas plan sells power from two Direct Energy generators that are fueled with gas from the King Ranch, which covers 825,000 acres in South Texas. It's not the cheapest electricity out there. Direct Energy's listings on the state's Power To Choose electricity comparison shopping website (www.powertochoose.com) offers a 12-month contract at 9.7 cents a kilowatt-hour for a customer using 1,000 kilo-watt hours a month. Other providers have deals for as little as 8 cents for 12-month contracts, but those typically are a mix of fuels, including coal. Direct Energy also has a Texas wind plan for 9.8 cents -- again, not the cheapest on the market, as several others are at 9.0 cents or less.

-- Jim Fuquay

Solar energy could help Texas peak power demand, study says

Brattle Group, which just completed a study of the Texas electricity market for the state's largest grid operator, says it will release a new study next week that shows the state would benefit from more solar power. The new report is funded by the Solar Energy Industries Association and the Energy Foundation, which promotes energy efficiency and renewable energy. It looks at "how much electricity prices for Texas consumers would be reduced by adding solar capacity to the Texas electricity market." It's set to be released June 19. According to a news release announcing the report, it "shows the total potential cost savings for electricity customers through reduced prices from additional electricity generation, lower fuel costs from utilizing solar instead of additional fossil fuel electricity generation, and the lower costs for operation and maintenance that come with solar energy." Brattle's earlier study for the Electric Reliability Council of Texas recommended, among other things, allowing peak power prices to rise to encourage more generation.

-- Jim Fuquay

$1.4 million electricity bill -- and it's not even August yet

An Abilene woman received an electricity bill for nearly $1.4 million, but not to worry -- her power company, Potentia Energy, says it's obviously an error and they'll figure it out. In any case, it's quite a jump from her previous bill for $100.78. Scripps Howard News Service has the story here.

-- Jim Fuquay

ERCOT unveils electricity conservation alert app

The Electric Reliability Council of Texas, operator of the state's largest electricity grid, is making it easier for conservation-minded residents to save power when electricity demand rises to peak levels. The state's ability to continue to meet peak power demand has been a major concern to ERCOT and state policymakers in the past year. The app is available for Apple iOS devices and Android smartphones.

-- Jim Fuquay

Consultant recommends changes to Texas electricity market

The most efficient way for the state’s largest electricity grid to combat predicted power shortages in coming years is through a system, used in other deregulated markets, that encourages generators to build new supply by bidding for power several years in the future, a consultant hired to examine the issue reported today. Other options include allowing higher prices during peak demand periods, arranging additional back-up power sources and encouraging ways to reduce demand during peak periods. The Brattle Group study was performed for the Electric Reliability Council of Texas, which serves about 75 percent of the state, and the Public Utility Commission of Texas.

Brattle’s recommendation to use what is called a "forward capacity market" would inject a new role for regulators and is somewhat at odds with the state’s so-called “energy only” deregulated market. Currently, price alone drives generators’ decisions whether to build additional supply or not for the ERCOT market. Brattle said the forward capacity market has been used in the Northeast, and Texas could learn from those experiences if it adopts this model.

The report also concludes that because unusually low natural gas prices have kept down wholesale electricity prices, “ERCOT’S current energy-only market is not likely to support sufficient investment to meet” its goal of a 13.75 percent reserve in excess of projected peak demand. It suggests examining whether that reserve margin could reasonably be set at a lower level.

Trip Doggett, CEO of ERCOT, said that while ERCOT and the PUC have made several moves to maintain adequate capacity, “this report highlights that there is more work to be done.” 
The Lone Star Chapter of the Sierra Club issued a statement faulting Brattle for not adequately considering the benefits of higher state energy-efficiency standards and mandates for more renewable electricity sources, such as solar.

-- Jim Fuquay