Arkansas Electric Energy Law : Arkansas Electric Energy Lawyer & Attorney : Eric Hughes Law Firm : Wind & Solar Power, Distributed Generation : Arkadelphia, Little Rock, Pine Bluff

The Wind Coalition, a group devoted to the development of wind energy in the United States, is attempting to intervene in the Arkansas Public Service Commission's White Bluff Docket, wherein Entergy Arkansas and the other owners of the White Bluff generating facility seek approval for environmental upgrades.  According to the Wind Coalition's filings, its

members have begun acquiring land rights to potentially construct wind farms in and near Arkansas, and are willing and able to provide renewable energy in Arkansas to [Entergy Arkansas] or other companies.  A Declaratory Order from the Commission indicating that the Project (which, as structrured, has no renewable generation component) is in the public interest would potentially preclude the Wind Coalition from providing such renewable energy to [Entergy Arkansas] or another entity in the future.

In addition, the Wind Coalition states that permitting it to intervene would:

• ensure that wind energy is considered on the same playing field as other types of generation such as coal, nuclear, and natural gas;
• assist in the evaluation of Entergy's price assumptions for coal supply; the capital costs of wind power; wind capacity factors; the economic impacts of joining the Southwest Power Pool; and whether Entergy considered the improved import capability from the upcoming transmission upgrades approved over the next four years;
• assist the Commission in developing a full, fair and adequate record upon which to base its decision concerning whether the White Bluff upgrades as currently structured is in the public interest.

Entergy asserted in its original petition that it "considered whether renewable generation and efficiency alternatives would be appropriate for comparison" but "concluded that it would be unrealistic to assume that either alternative" would be effective.  If the APSC permits the Wind Coalition and other similar groups to intervene in this docket, submit additional evidence, and independently evaluate Entergy's analysis, would certainly go far "in developing a full, fair and adequate record upon which to base its decision regarding the proposed White Bluff upgrades.

A new Natural Resources Defense Council report, A Clean Energy Economy for Arkansas, argues that clean energy is a key factor for rural economic development in the state.  Some key facts underlying the analysis are:

• Each year Arkansans spend $10.1 billion for fossil fossil fuels.
• Which translates to $3,500 in energy costs for every person (not household) in the state.
• 78% of those energy dollars leave the state, never to return.

Arkansas ranks 13th in per capita energy consumption, and is expected to need 2,500 megawatts (MW) in new generating capacity over the next 15 fears.

The report cites a previous NRDC study indicating that "green jobs" primarily in construction, engineering, installation, agriculture, and operation of rural energy production facilities -- jobs which cannot be exported.  According to the report, clean energy investments 3.6 times more jobs for people without a college education, and 2.6 times more jobs for people with a college education, than comparable investments in fossil fuel energy.

The report goes on to examine

the potential for renewable resource development in Arkansas and finds unprecedented opportunity for long-term economic growth in rural communities as well as new income sources fro farmers from an array of emerging clean energy technologies, particularly wind, biofuels, biopower, and biogas.

 Wind Power.  40 of Arkansas's 75 counties have commercially viable wind resources.  A federal government study projects that 1,000 MW of generating capacity would create $830 million in economic benefits over 20 years, including 3,496 construction and locally stimulated indirect jobs and 504 permanent operations jobs.

Biofuels.  With its strong agricultural base, Arkansas is "perfectly situated to become a center for the next generation of biofuels production."  Existing Arkansas crop and timber residue are "sufficient to produce 770 million gallons of transportation fuels each year, equivalent to 50 percent of all the gasoline used in Arkansas.

Biopower.  The report points out that combining solid biomass with coal at existing power plants is a relatively low-cost way to ramp up renewable resource development.  "If 10 percent of Arkansas's coal-fired power capacity were replaced with biopower, more than 700 new long-term jobs would be created, not including new agricultural jobs to produce and harvest the biomass fuel."

Biogas.  Methane from decomposing manure has 21 times the global warming potential as carbon dioxide.  While Arkansas is one of the nation's leading livestock and poultry producers, it has no operating biodigesters.  "In addition to providing a potential source of revenue and energy for livestock operation, anaerobic digestion systems create high-quality fertilizer and other byproducts while reducing odors, water pollution, and emissions.

Important Point.  Even the Arkansas Energy Office recognizes the potential for producing electric power with biomass, estimating that Arkansas has sufficient biomass potential to supply 150 percent of the state's residential electricity use.

Wind power doubters beware -- wind power can produce enough electricity to meet a significant portion of demand.  For example, on the night of November 8, 2009, Spanish wind power produced at its peak 53.7% of the total electricity demand in Spain.

The Spanish Wind Energy Association said the sustained peak in wind powered electricity production proves that “wind energy is no longer marginal”. By 2020 Spain is expected to double its wind-power producing capacity from the current level of 16 gigawatts to 45 GW. “With this expected growth in capacity we could envisage wind meeting the vast majority of demand during times of peak supply by 2020,” Jacopo Moccia, regulatory affairs adviser for EWEA said.

Any increase in wind energy capacity in either Arkansas or surrounding states should be good for our economy, especially since Arkansas is becoming a leading center for blade manufacturing.

With the debate over the cost of generating electric power by fossil fuel versus renewable resources, a new report from the National Research Council is timely.  Congress requested the report to assess the external effects caused by various energy sources over their entire life cycle -- for example, not only the pollution generated when gasoline is used to run a car, but also the pollution created by extracting and refining oil and transporting fuel to gas stations.  These effects are often not reflected in energy prices, so government, businesses, and consumers may not realize the full impact of their choices.

The committee that wrote the report focused on monetizing the damage of major air pollutants -- sulfur dioxide, nitrogen oxides, ozone, and particulate matter -- on human health, grain crops and timber yields, buildings and recreation.  The report concluded that electricity produced from coal at 406 coal-fired power plants had non-climate related external costs -- not reflected in the price the electricity consumer pays -- of $62 billion, or about 3.2 cents for every kilowatt-hour (Kwh) produced.  The climate based monetary damages range from 0.1 to 10 cents per Kwh.  The report also stated that coal-fired plants are the single largest source of greenhouse gases in the U.S.

On the other hand, the life-cycle damages of wind power are small.  Although wind power currently produces just over 1 percent of U.S. electricity, it has large growth potential.

Why this is important for Arkansans? 

• Arkansans have relatively poor health compared to the rest of the nation and health care costs are rising.  Coal fired power plants contribute to both problems.
• Agriculture, timber production, and outdoor recreation are a big part of the state's economy.  Coal fired power plants can hurt those parts of our economy.

Energy law and policy are important issues in our time.  On the one hand, energy needs are projected to grow at an accelerating rate, taxing the supply of available energy resources and increasing our dependence on foreign sources of energy.   On the other hand, energy generation, transmission, distribution, and consumption contribute to climate change and have other adverse environmental consequences.  Supplying our energy needs now and in the future --at a reasonable cost and with the least possible negative impact on the environment -- is a challenge that confronts us all.

However, there are opportunities in these challenges, particularly in the field of electric energy.  While still small, the share of utility scale electric generating capacity taken by wind, solar, geothermal, biomass and other renewable and alternative sources of energy will only grow.  Even so, those sources of electricity generation currently have their own limitations, such as reliability for base load, along with siting and transmission issues.  While those alternative sources of energy hold out promise for the future, the current reality is that older and cheaper technologies for producing electricity, like coal and natural gas fired power plants and nuclear power, will be the primary sources of electric energy for the foreseeable future.  But some argue advances in clean coal technology and carbon capture and sequestration will reduce the environmental impact of those sources of electric energy.  Although, cap-and-trade legislation such as the American Clean Energy and Security Act of 2009 (Waxman-Markey), which attempts to impose the true costs of those dirtier technologies, could put renewable energy resources on an equal economic footing.

Moreover, new technologies in demand side management hold out the promise of increasing energy efficiency in ways that are both observable and measurable by the average electric energy consumer.  Advanced metering and smart grid technologies, coupled with appliances equipped with computer chips to communicate with the meter, and software to measure and report electric usage, will empower consumers to take more control over their own energy usage.  Those same technologies, including net metering, will increase the effectiveness of distributed generation systems like residential solar and small wind installations.   All these advances will change the consumer's relationship with their electric power supplier.  Thus, new regulatory and rate-making mechanisms must be studied, including decoupling of the rates electricity distributors charge from the amount of electricity supplied.

These are interesting times for electric energy law and policy, and Arkansas is at the forefront of confronting the challenges and capitalizing on the opportunities.  For example, the continuing fight over the location of SWEPCO's John W. Turk coal-fired generating plant in Hempstead County has implications for electric generation and transmission in Arkansas and across the nation.  And, with the location of LM Glasfiber and Nordex wind turbine blade manufacturing facilities in Arkansas, the alternative and renewable energy sector is contributing to economic development and job creation.

At the Hughes & Hughes Law Firm we have been following these issues with interest.  We want to be a participant with you in meeting the challenges of our time.  Therefore, this blog is designed to be a source for news and commentary about electric energy law and policy that effects Arkansas business, industry, municipalities, landowners, consumers, and others.  We hope you will join our conversation.