Fuel Diversity, Coal and PURPA

During the debate over the clean energy agreement with CWLP, one of the arguments advanced by the Sierra Club was that CWLP could benefit financially down the road by diversifying its sources of energy, should the price of coal go up. I didn't think the strength of that argument would be reinforced so quickly with news about rising coal prices for Springfield.

The main benefit of coal is that its a very cheap energy source (if you only consider the up-front costs, without regard to broader environmental impacts). Today's story is a reminder that this may not always be the case. Besides what would happen to the price of coal nationally if there were a disruption in rail lines leaving Wyoming, likely regulation of carbon emissions at the national level will increase the cost of coal generation as well. Those who plan on coal always being as cheap and reliable as it has been in the past may be in for a rude awakening.

That's one of the reasons why federal law requires utilities to consider their fuel diversity as part of the PURPA standards. A few months ago I would have expected someone to excuse themselves if they blurted out "PURPA!" during a conversation. But I've been learning more since I attended a hearing at the end of May where CWLP presented its proposals for adopting the PURPA standards.

Springfield is lucky to have Greg Claxton at Clean Energy Springfield who has far more academic background in these issues than I do. His posts (including an overview with more detailed posts about fuel diversity, net metering, smart metering and interconnection) are the reason I haven't felt the need to write about this before. You should also check out CWLP's page on the public hearing where you can read the transcripts and submit comments.

There are some good things about CWLP's proposal but CES hopes they'll do more to encourage net metering, smart metering and provide incentives for people to do things like install solar panels on their home. My general impression is that when CWLP felt they could make money with a policy they supported it, and when they were concerned it might cost money they opposed it or pushed the costs of implementation onto participants.

As a customer, I definitely appreciate the business minded attitude they have about keeping rates low. There's also no doubt that I would rather deal with CWLP than a private utility like Ameren any day of the week. CWLP scores higher than Ameren on any measure I can think of including environmental policies, rates, maintaining the grid, and customer service.

But as I said during the debate over the Sierra Club clean energy agreement, I think a municipal utility also has a responsibility to consider the public health and quality of life in the community it serves. I also think a little investment in up-front costs and incentives to encourage more alternative energy use in Springfield will be financially beneficial in the long run.

Besides the fact that encouraging locally generated clean energy is good for the environment, I think it will increase Springfield's desirability as a community. Suppose someone is considering moving a business or building a large new home in central Illinois and they want to use the latest practices to conserve energy, build photovoltaic solar panels on the roof, install a geothermal heating/cooling system, and is willing to reduce their energy use during peak hours. If a neighboring community (Normal, for example) provides incentives for anyone taking those steps that will save them money, while Springfield has a hesitant set of policies that make it costlier to take action, in which community do you think that new building is going to be located?

Springfield can be a town that encourages forward thinking businesses and smart energy use, or we can be a town that forces people concerned about the environment to locate elsewhere.

Springfield took a big step forward by purchasing wind power and committing to increase spending on energy conservation and efficiency. The PURPA standards that will soon go before the City Council are a chance to build on the big successes we've had in the last year and I hope the city will take this opportunity.

As important as this story is, I've only seen it covered by Abbie Alford at WCFN and R.L. Nave in the Illinois Times. There's another reminder why those are two of my favorite reporters in town. This is a complicated issue that makes for a boring story in some ways, but I'm sure you'll see other news outlets cover it soon.