Koch’s War on Renewables Bogging Down as US Heartland Wakes to Risks of Climate Change, Benefits of New Energy

April 28, 2014

The biggest lease holder in the Alberta Tar Sands is not Exxon or Shell, it’s the Koch Brothers.
Sons of John Birch Society founder Fred Koch, the two brothers are no longer just a hobbyhorse for  lefty blogs – their pursuit of personal profits over humanity, nature, and the planet itself is now the subject of examination by major news outlets.

Koch fingerprints are all over the right wing media frenzy over militant racist deadbeat Cliven Bundy and his camo-clad nutcase followers.  That’s not the only disappointment for the Kochs of late.

NYTimes:

At long last, the Koch brothers and their conservative allies in state government have found a new tax they can support. Naturally it’s a tax on something the country needs: solar energy panels.

For the last few months, the Kochs and other big polluters have been spending heavily to fight incentives for renewable energy, which have been adopted by most states. They particularly dislike state laws that allow homeowners with solar panels to sell power they don’t need back to electric utilities. So they’ve been pushing legislatures to impose a surtax on this increasingly popular practice, hoping to make installing solar panels on houses less attractive.

But the Big Carbon advocates aren’t giving up. The same group is trying to repeal or freeze Ohio’s requirement that 12.5 percent of the state’s electric power come from renewable sources like solar and wind by 2025. Twenty-nine states have established similar standards that call for 10 percent or more in renewable power. These states can now anticipate well-financed campaigns to eliminate these targets or scale them back.

The coal producers’ motivation is clear: They see solar and wind energy as a long-term threat to their businesses. That might seem distant at the moment, when nearly 40 percent of the nation’s electricity is still generated by coal, and when less than 1 percent of power customers have solar arrays. (It is slightly higher in California and Hawaii.) But given new regulations on power-plant emissions of mercury and other pollutants, and the urgent need to reduce global warming emissions, the future clearly lies with renewable energy. In 2013, 29 percent of newly installed generation capacity came from solar, compared with 10 percent in 2012.

The utilities hate this requirement, for obvious reasons. A report by the Edison Electric Institute, the lobbying arm of the power industry, says this kind of law will put “a squeeze on profitability,” and warns that if state incentives are not rolled back, “it may be too late to repair the utility business model.”

Since that’s an unsympathetic argument, the utilities have devised another: Solar expansion, they claim, will actually hurt consumers. The Arizona Public Service Company, the state’s largest utility, funneled large sumsthrough a Koch operative to a nonprofit group that ran an ad claiming net metering would hurt older people on fixed incomes by raising electric rates. The ad tried to link the requirement to President Obama. Another Koch ad likens the renewable-energy requirement to health care reform, the ultimate insult in that world. “Like Obamacare, it’s another government mandate we can’t afford,” the narrator says.

Washington Post:

But the campaign — despite its backing from powerful groups such as Americans for Prosperity — has run into a surprising roadblock: the growing political clout of renewable-energy interests, even in rock-ribbed Republican states such as Kansas.

The stage has been set for what one lobbyist called “trench warfare” as moneyed interests on both sides wrestle over some of the strongest regulations for promoting renewable energy. And the issues are likely to surface this fall in the midterm elections, as well, with California billionaire Tom Steyer pouring money into various gubernatorial and state and federal legislative races to back candidates who support tough rules curbing pollution.

The multi-pronged conservative effort to roll back regulations, begun more than a year ago, is supported by a loose, well-funded confederation that includes the U.S. Chamber of Commerce, the National Association of Manufacturers and conservative activist groups such asAmericans for Prosperity, a politically active nonprofit organization founded in part by brothers David and Charles Koch. These groups argue that existing government rules violate free-market principles and will ultimately drive up costs for consumers.

But the strong winds that blow across Kansas have carried new interest groups into the state. Kansas ranks sixth in the country in wind output, which jumped by a third last year and equaled 19 percent of the state’s electricity, the EIA says.

The growing number of wind farms not only generate power but royalties for landowners. Dorothy Barnett, executive director of the Climate and Energy Project, said that Kansas landowners receive more than $13 million a year. “This issue is an issue that touches rural Kansans, and we have a lot of rural Kansas legislators,” she said.

Wind proponents cite manufacturing jobs, too. At a plant in the state, Siemens is making nacelles, the automobile-size units that contain wind-turbine gearboxes and electronic control equipment, for the biggest turbine order ever for wind farms in Iowa.

Supporters of repeal had trouble making the argument that the renewable-energy mandate had raised electricity rates by 40 percent, as ALEC asserted. The Kansas Corporation Commission reported that the rate impact of renewable-energy standards was about 0.16 cents of the 9.2-cent retail cost of electricity per kilowatt hour. It said that meeting the requirement “requires less than 2 percent of the revenue requirement of the utilities while supplying more than 10 percent of the generation capacity in the state.”

Eventually, the Kansas Senate passed two bills, one postponing the renewable targets and one repealing them. Both failed in the state House, although the bill’s backers have vowed to bring them back.

Fred Abels in Des Moines Register:

Iowa has been a leader among the states as America has grown into a global clean-energy leader, with the potential to go even further. Today, there are 80,700 wind energy jobs and 142,698 solar energy jobs across the nation. Construction of turbines, solar panels and associated parts has led to a manufacturing boom in a number of states.

This level of investment also provides new sources of revenue from property taxes. In the case of wind farms, that figure can come out to $189 million annually to a local county tax base. This new income for rural communities means more resources for fire and police departments, schools, infrastructure and other public services.

Great stories abound. Farmers Electric Cooperative in Frytown, Ia., has started moving on a project that would be the single largest solar farm in Iowa, if not the Midwest. The 750 KW solar project would provide all of the energy for two local organic and all-natural agriculture businesses that are served by the co-op.

The cooperative has also committed to using U.S.-made parts for the project, feeding the renewable energy economy. Besides creating local, renewable energy, efforts like this one help bring new economic opportunities to small communities.

Renewable energy is a drought-resistant crop that helps grow communities, with average land-lease payments of $10,000 per turbine each year for landowners. Wind and solar energy have grown rapidly in recent years and brought a bright future with it.

A clean-energy economyand agricultural solutions can provide a one-two punch to climate change. The Intergovernmental Panel on Climate Change recently released its fifth assessment report (http://ipcc.ch/report/ar5/), which reaffirms that without adaptation, increased temperature, frequency of extreme events and reduced water supply would result in productivity declines in major North American crops and pose a threat to global food security.

FRED ABELS lives and farms near Holland, Ia. He participated in the discussion on climate change hosted by the Center for Rural Affairs and Bethesda Lutheran Church in Ames on March 30. 

 

 

 

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18 Responses to “Koch’s War on Renewables Bogging Down as US Heartland Wakes to Risks of Climate Change, Benefits of New Energy”


  1. US coal quality is going down- the best high energy stuff was mined first as was the easy to get stuff- this applies to all fossil fuels. There is some interesting studies on US coal reserves which indicate that on energy content and economics US coal has peaked- in the UK our 100s of years of coal got downgraded 99% in just 20 years.

    The future is clear [and even the present once the shale bubble settles down] fossil fuels are getting more expensive – to remain profitable the country has to be hooked on carbon- any alternatives will see a sudden transition.

    we don’t put up with VHS even though it was cheaper than DVD or Blueray, we switched from dial up to Broadband because it was better although more expensive. The free-market will make energy efficiency and renewables the best option, but the old utilities are trying to fix the market and keep renewables apparently more expensive.

    interesting times.

    • philip64 Says:

      Absolutely right. Fossil fuels can only get more expensive the more they are used – growing demand, dwindling supply. Renewable energy, like all new technology, only gets cheaper the more widely it is taken up. Broadband used to be expensive; then millions of people started to get it; now it’s cheap. I remember when a phone call to Australia cost several dollars a minute. Now it’s several cents. Same thing.

      Still, we need governments to realise that the financial and economic benefits of clean energy will arrive a lot sooner if a clear industrial roadmap is in place, with renewable energy targets in place. Once that’s in place subsidies will soon become unnecessary.

      • andrewfez Says:

        Same thing in reverse for the coal industry: as demand is scaled back, its support infrastructure dwindles to fewer players that will charge a hefty premium for their services to hedge against the profit risk. And its ability to bribe politicians dwindles.


  2. a nonprofit group that ran an ad claiming net metering would hurt older people on fixed incomes by raising electric rates.

    Ad-hominem argument.  The author never asks if the claim is right or wrong, it’s branded as coming from the enemy.  Such thinking is essentially totalitarian.  Worse, the claim is much older than any Koch effort to make it more widely known.  It’s obvious to anyone with knowledge of how the grid works.  Tying it to the Kochs isn’t reporting, it’s a smear.

    As for the factual basis of the claim, it’s obvious that
    (a) Net metering users do consume services provided by the grid, starting with the connection itself and the infrastructure which supports it;
    (b) Net metering users do increase some costs of the grid, such as regulation; and
    (c) To the extent that those costs were rolled into the per-kWh rates, net metering users are transferring them to other consumers or the utility itself.

    To have net metering, you’ve got to have a grid.  The companies which run the grid have to be able to cover their costs.  If you don’t bill the cost of providing services, including the connection, they’ve got to be paid by someone or something else.  The facts allow no other conclusion.

    If net metering customers provided other services, such as using storage to provide regulation and spinning reserve, their contribution to the grid would be worth more.

    meeting the requirement “requires less than 2 percent of the revenue requirement of the utilities while supplying more than 10 percent of the generation capacity in the state.”

    Note, “generation capacity” (nameplate power rating) is not energy production.  Germany’s much-vaunted PV produces at an average rate of 110 millwatts per rated watt.

    If the reporter, er, writer, was actually doing journalism instead of ideology, he’d compare wind to the cost of other generation and the fraction of the state’s energy it supplies.  No analysis would be complete without adding a figure for externalized costs, such as CO2 emissions.  But just writing in factoids suitable for sound bites contributes nothing.

    • ubrew12 Says:

      “The author never asks if the claim is right or wrong” They don’t have to. It merely has to be truthful, which it is. “Tying [the claim] to the Kochs… [is] a smear” they don’t tie the claim to the Kochs, they tie the ads and the push for a surtax on the Kochs – which seems a valid tie to make. In which case, ask yourself why a group of people like the Kochs who cry ‘stop big government regulations’ every time those regulations impact their business are now so anxious to impose such regulations on their competitors. THAT is the story here. Apparently, the actions of the Koch’s and ‘American for Prosperity’ do not now, nor have they EVER, been in service to the ‘free, unregulated market’. They are perfectly willing to cry ‘that’s not FAIR’ when the wind is (literally) in their face, and seek to regulate their competition out of existence. Have you SEEN the cliff Solar PV costs have fallen off of in the last few years? To refresh your memory:
      http://tinyurl.com/msjtfbx
      I would be seeking government protection too. But lets call it what it is, OK? “If the reporter… was actually doing journalism instead of ideology” Assuming you mean the NY Times (climate crocks definitely comes from a point of view), this article was in their Sunday Editorials section. They weren’t reporting: they were pontificating.


      • In which case, ask yourself why a group of people like the Kochs who cry ‘stop big government regulations’ every time those regulations impact their business are now so anxious to impose such regulations on their competitors. THAT is the story here.

        As in “The Koch brothers finally get one right”?  I don’t mind damning them with faint praise, so long as the truth isn’t a casualty of the war.

        Apparently, the actions of the Koch’s and ‘American for Prosperity’ do not now, nor have they EVER, been in service to the ‘free, unregulated market’.

        Neither were the original net metering laws which forced utilities to pay retail rates for excess power from their putative customers (previous regulations allowed utilities to pay only avoided cost, namely fuel).  The slightest bit of thinking about cases like “what if EVERYONE did it?” would reveal how the idea has inherent limits and needs to be revised now that, as you admit, PV is cheap enough to make it attractive.  The ads are part of the push for that revision.

        Have you SEEN the cliff Solar PV costs have fallen off of in the last few years?

        I’ve more than SEEN it, I’m now part of it.  That doesn’t mean I’m not going to be totally honest about what the system as a whole needs.

        If you look at the ERCOT event of 2/26/2008, you should notice one crucial thing:  the evening load ramp (which goes to the peak daily demand) doesn’t even begin until after 5 PM.  This is well past the PV generation peak and is around sunset in TX in February.  The peak demand period for the city electric co-op nearest to me isn’t noon to 4 PM, it’s 5 PM to 10 PM.  When this begins, solar generation is well past its peak; PV generation is zero for most of this period much of the year.

        How does solar PV help meet the biggest demands?  By itself, very poorly.  But net metering doesn’t address that issue.  Grid operators don’t have the luxury of leaving those problems to someone else.  I don’t want anyone to be able to profit from pushing them onto others.  Capsisce?

        • ubrew12 Says:

          “I don’t want anyone to be able to profit from pushing them onto others.”
          That sounds very holy but here’s the context: a fossil fuels industry that’s been pushing its ‘negative externality’ cost onto our grandchildren for half a century. Solar is what? ZERO percent of total power production? Oh, sure. After giving the fossil fuels industry a PASS for filling the planet with their garbage for 50 years, lets absolutely make sure Solar is regulated for ‘fairness’.

          In 2007, Climatologist Pat Michaels ‘World Climate Report’ was outed as funded by the ‘Western Fuels Association’ (of coal mining and coal-fired utility interests). This had been going on for two decades. The ruse exposed, many of the utilities you are now so bereft over pulled their funding. It seems they wanted their advocacy to remain anonymous. And, thus exposed, what about Michaels? Don’t worry, he’s pulling a hefty paycheck over at the libertarian Cato Institute. And, after all this duplicity, you now are beside-yourself over solar-pV ‘FAIRNESS’???

          You want some cheese with that whine?


          • Way to beg the question.

            I’m all for internalizing the cost of GHGs and other toxics, like mercury.  But that doesn’t have anything to do with keeping a grid running.  A net metering customer presumably hooks up because the grid offers value; otherwise they’d go completely off-grid.  Over-compensating them for what they’re giving does not solve problems, it creates them.  Create enough problems and the grid can black out or go bankrupt and cease to exist, and the value proposition that attracted the net metering customer in the first place is destroyed.

            Further, if GHGs are the main problem, there’s more than one way to address them.  The entities doing that work all deserve compensation, not just for raw energy but for virtues like having energy available at need rather than at nature’s whim.  That is something that your net metering generator truly sucks at.

            Now, do you want to solve problems or just whine that your favorite thing may not get a deal that even you can’t defend on its merits?

  3. adelady Says:

    (c) To the extent that those costs were rolled into the per-kWh rates, net metering users are transferring them to other consumers or the utility itself.

    Easily fixed. Change the accounting.

    Where I live every household, every business receives their power bills with at least two lines on it. One line for “supply”, at least one line for consumption (there are higher/lower rates for various forms of consumption).

    Those of us with solar panels have an extra couple of lines showing the credit for the power we supplied back to the grid. I might add that in this state, 25+% of households have solar PV on their roofs.

    The big advantage of this approach to billing means that anyone who instals panels on their roof sees no change to their bills except the credit for the power supplied.


    • Easily fixed. Change the accounting.

      If this change results in cheaper power for heavy users and lower credits for net metering users, I bet that you’ll have the same two camps fighting the same fight as today.  After all, what’s the proposed fee but an accounting change?

      • adelady Says:

        The proposed fee is an additional charge that other consumers don’t pay.

        When I say “accounting” I’m talking like an accountant. It would require the suppliers to analyse their own accounts and their investments in infrastructure and work out how much consumers should be charged for access to their supply, including ongoing maintenance and financing of upgrades.

        Once that’s done, all accounts – not just those of households and businesses with solar PV – everyone, would include split charges, one charge for access to the grid, and other variable charges for consumption of power. When the price of fuel goes up, only the variable charges are raised. This makes it harder for utilities to handwave away increased prices by saying one day that it’s increased fuel costs, another day that it’s increased grid maintenance costs.

        Most importantly, it allows utilities to vary grid maintenance charges in accordance with known or anticipated wage or other costs which are incurred regardless of fluctuations in prices of fuels or quantities of power consumed. For consumers, it means that they can decide whether they want to generate enough power for the whole of their anticipated power bills, including the grid costs, or whether they’re happy to cover just their power usage and treat the grid cost in the same way as routine coverage/ access costs of insurance or phone or internet.


        • The proposed fee is an additional charge that other consumers don’t pay.

          You do have to admit that such a fee is a lot simpler than a wholesale breakdown of electric bills into dozens of pieces, each with its own tariff.

          Once that’s done, all accounts – not just those of households and businesses with solar PV – everyone, would include split charges, one charge for access to the grid, and other variable charges for consumption of power.

          There’s more to the variable costs of the grid than that.  The nature of the power consumption, such as its harmonic content, its power factor and its variability all affect how much it costs to serve.  Some of this is reasonably handled with a fee for peak demand, but demand on a low duty cycle is expensive to serve, and demand which is correlated with demand peaks costs much more to serve than demand correlated with off-peak conditions.

          The variability of PV drives up the LCOE from its essential backup systems.  The gas turbine that’s driven from 60% duty cycle down to 50% has its fixed costs per kWh driven up by 20%.  Then there’s the inversion in assumptions for time-of-day rates.  The late morning to mid-afternoon rates were historically set by the characteristics of the demand curve, and how much it cost to serve.  We could soon have a situation where PV drives net noontime demand to the point where even the must-run generators have trouble staying on-line, and wholesale prices way down… but the PV owners are being compensated according to a tariff for conditions they’ve eliminated.  The utility would be paying a near-premium rate for power that is in surplus and worth very little.

          This just screams for the power to be time-shifted a few hours to the evening demand peak, unless it can be consumed on the spot (e.g. ice-storage A/C).  Not only does there need to be storage, there needs to be integration with the grid so that operators know how much power is coming in and how much stored energy is out there.  The storage resources need to be made available as reserves.  Over-generation at any time of day needs to be rewarded with a zero or negative price for bad behavior.

  4. mbe11 Says:

    If you have no facts on your side or little facts the favorite tactic is to throw in some bogeyman. Hitler threw in the Jews, the communists threw in the capitalists, the left in this country throw in the Kocks. They may be rich, they may be scoundrels, but the argument for an against having renewables help pay for the electric net have zero to do with bogeymen and a lot to do with how you pay for the electric grid. The grid is not free, it is a substantial cost of making sure everyone, big or small has electricity when you throw on that switch. Why should solar producers have a free ride on the rest? they need the grid as much as anyone unless someone invents a storage device that can store safely hundreds of kilowatts in every house, something better than that electric car which catches fire every once in a while.

    • ubrew12 Says:

      “that electric car which catches fire every once in a while”
      Fortunately, gasoline doesn’t catch fire…

    • adelady Says:

      “Why should solar producers have a free ride on the rest? they need the grid as much as anyone”

      See my response to EP above.

      I really don’t understand why this is such a problem in the US. Our power and water accounts have been structured this way for at least a decade.

      • dumboldguy Says:

        “I really don’t understand why this is such a problem in the US. Our power and water accounts have been structured this way for at least a decade”.

        It’s only a problem in some places in the U.S. because someone wants it to be—-probably those who want to evade the issue because they are afraid it will impact their profits somehow.

        In Northern VA, electricity, gas and even sewer/water bills are broken out in so many ways that they are pages long—-system charges, consumption charges, various “adjustments” for purchases of electricity or gas from afar, seasonal adjustments, heat content adjustments for the gas, tiered rates to encourage conservation, taxes tacked on as revenue sources for government—-I don’t really know how it’s done here, but it would appear to be easy to program the computers to factor in solar PV. We have had for many years the option of allowing the power company to remotely shut off HW heaters and A/C at times of peak demand for load leveling purposes, and they factor in a reduction for that.


  5. There are several problems with this meme of dividing rooftop solar users from non solar users. One is the implied assumption that electricity prices rise. We should examine that to see if its true rather than pass on its hidden implication. Here is some evidence to the contrary.
    http://cleantechnica.com/2014/04/28/solar-cutting-grid-costs/
    http://cleantechnica.com/2014/01/12/solar-dropping-wholesale-electricity-prices-like-bad-habit-charts/
    So here we have evidence that solar lowers wholesale rates.
    There are several other logical inconsistencies. One of them is that a large portion of the solar capacity may be utility based. What then? The pot calling the kettle black? So what is really going on here? Utilities are abandoning old, expensive, and dirty coal generation at large central generation stations. Meanwhile, demand has leveled or stopped. The utilities need increasing demand to pay for the high capital costs. They are stuck with low demand. That low demand is due more to conservation than solar PV. Always looking for a fall guy, the utilities are looking to stick the ratepayers with the bill for their bad investment in coal. Private profits, public losses. Corporate welfare. Meanwhile, the truth is that solar lowers everyones electricity bill because next years rates are based on this years peak demand. Guess which technology lowers peak demand? Solar. Thats right. Solar.


  6. […] 2014/04/28: PSinclair: Koch’s War on Renewables Bogging Down as US Heartland Wakes to Risks of… […]


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