“Ameren Corporation claims, putting in SO2 scrubbers would cost more than securitizing Rush Island’s ‘stranded assets.’ However, Ameren is avoiding what it would fully cost to replace Rush Island’s critically needed and reliable capacity.”
Thomas Jefferson wrote in Volume 4 of Notes on Virginia: “With money we will get men, said Cæsar, and with men we will get money.”[1]
Such threats to keeping our constitutional republic are increasingly evident with the weaponization of many Federal Agencies (e.g., the Department of Justice, FBI, etc.), as well as numerous Biden Executive Orders for federal agencies to fight the “existential” threat of anthropogenic global warming (AGW).
These threats, coupled with the plague of “woke” political agendas promoting “Environmental, Social, and Governance” (ESG) and/or “Diversity, equity, and inclusion” (DEI), are forcibly reaching leading “investment management” firms (e.g., BlackRock, Vanguard, Fidelity, State Street Global Advisors, and J.P. Morgan).
Enter Missouri, where our utility Ameren Corporation drinks the green Kool-Aid as evidenced by their “woke” pitch to J.P. Morgan on June 22, 2023, titled Powering a Smart, Sustainable Tomorrow.
The ESG/DEI cult has also infiltrated energy utility trade associations. For example:
Scrapping Reliable, Clean-up Capacity
The cast of characters goes to the state regulatory side. Ameren, through Missouri Public Service Commission (MOPSC), proposes (Docket EF-2024-0021) to scrap (as opposed to retire and “mothball”) its best performing coal plant, the Rush Island Energy Center, through a recently enacted “securitization” bill and replace it with a mix of renewables plus batteries (R+B).
The reasons for this “retirement” go back over a decade. Improvements at Rush Island increased efficiency and capacity but also increased Sulfur Dioxide (SO2) emissions there. Ameren got sued by DOJ (representing the EPA). The Sierra Club intervened in February 2017 seeking to further its own “Beyond Carbon” agenda (underwritten by Michael Bloomberg). For Sierra Club’s summary, see Federal Court Rules Ameren Missouri Must Install Pollution Controls.[2]
Ameren is a willing participant, as they stand to get seven times (or more) the rate base from a renewables program as compared to continued operation of fossil-fueled power plants such as (but not limited to) Rush Island. That spells increased profit for the utility. But at what long-term costs to consumers and overall economic sustainability?
Media Coverage
News coverage of this docket has been largely benign towards Ameren (given the widespread indoctrination about AGW within mainstream media). However, locally, a notable exception has been Nathan Bechtold, who writes for LakeExpo.com as its Editor in Chief.
In my opinion, Nathan Bechtold has the talent to be a great investigative journalist, perhaps even in the league of Robert Bryce someday. Prime examples of Bechtold’s journalism include:
My Motion on the Issues
If you open to MOPSC Docket EF-2024-0021 and scroll down, you will see all parties who have filed documents in conjunction with this docket. One of these is my motion to intervene, timely filed on December 15, 2023.
So far, my motion has not been approved. Ameren has filed a response in opposition to my motion. On January 5, 2024, I filed a response to Ameren’s objections to my motion to intervene. At the time of this writing, it might not be looking good for me (versus Goliath Ameren) in that MOPSC’s “proposed procedural schedule” that does not list me as a party to this case. So much for a free market voice in this debate.
What my motion, if approved, could contribute would include independent cost estimates and environmental concerns. We estimate it would cost $1 Billion to put SO2 scrubbers on Rush Island. According to Ameren, it would cost consumers less than $2 per month on their utility bills for a “securitized” recovery surcharge of its Rush Island “stranded assets.”
Thus, Ameren claims, putting in scrubbers would cost more than securitizing Rush Island’s “stranded assets.” However, Ameren appears to be avoiding what it would fully cost to replace Rush Island’s critically needed and reliable capacity. With a mix of R+B, as Ameren is proposing, we estimate it would cost $7 Billion and the R+B capacity would be far less reliable than that from a coal-fired Rush Island. $7 Billion may be overly conservative. Others have estimated $13 Billion, while some maintain it can’t be done at any cost due to the physics of R+B coupled with weather effects adversely impacting having enough of R+B capacity when you need it the most. I lean towards the latter.
How much R+B systems cost is a function of regional availability factors, which are a function of local weather patterns. For Missouri, a reasonable reliability factor for renewables is 15% on average; meaning that 85% of the time, renewable capacity is not available. This is where batteries come in to play, but not reliably. Batteries are stored energy, typically available for only a few hours, whereas polar vortex conditions, wind droughts (etc.) can last for many days (and some say weeks). For coal, natural gas and nuclear, capacity factors are largely reversed and in the range of 85% availability or higher. For the direct use of natural gas, it is available virtually 100% of the time.
Much of Ameren’s R+B economic analyses and projections have been made confidential and/or redacted (with PSC approval). Missouri, like most states, has an official office for consumer advocacy. Here in Missouri, it is called the Office of Public Counsel (OPC). To OPC’s credit, they have voiced objections to Ameren’s scores of redactions and claims of confidentiality. Ameren has replied in objection to OPC’s objections.
Assuming OPC prevails and gets access to confidential/redacted data, then what will they be able to do with it? To me at least, it appears that OPC does not have the requisite technical staffing to effectively challenge Ameren’s plans for replacing fossil fueled assets with renewables. Large commercial/industrial interests have been granted intervenor status and perhaps they may have the funding and willingness to take on Ameren’s plans. Or not.
The undeniable facts are that the electric grid is incredibly complicated (see The Rise and Fall of the American Electrical Grid). Accordingly, I’m not faulting staff for not having adequate expertise. That said, it is important to recognize what you don’t know as not knowing what you don’t know (or worse yet, not caring) will lead to calamity. AGW extremists, on the other hand, are at fault for willfully ignoring such complexities and it makes me wonder what their true agenda really is. Ignorance is definitely not bliss. To the contrary, “My people perish for lack of knowledge.”
Ratepayers?
Succinctly put, the odds appear heavily stacked against all classes of consumers (i.e., residential, commercial and industrial). Basically, the game is rigged. Integrated Resource Planning (IRP) has devolved into Institutionalized Revenue Plundering. The situation appears to be getting “progressively” worse. For example, see America’s judiciary is quietly receiving ‘training’ from leftwing climate group. To gain a better sense of the scope of this emerging “lawfare” threat, follow the links in the above listed article to the Environmental Law Institute and then the Climate Judiciary Project, then on to the downloadable “CLIMATE CHANGE DISINFORMATION LIABILITY UNDER THE FEDERAL TRADE COMMISSION ACT.
The MOPSC’s trade association is the National Association of Regulatory Utility Commissioners (NARUC) whereas the OPC’s trade association is the National Association of State Utility Consumer Advocates (NASUCA). Both trade associations appear to be heavily influenced by decarbonization via electrification interests as evidenced by the following:
Note: depending on your browser, you may need to search for the terms decarbonization and electrification.
Cleaned-Up Coal at Risk
Given Bloomberg’s funding of “Beyond Carbon,” probably approaching $1 Billion in total over the last decade (with nearly half of that budgeted in late 2023 for 2024), coupled with the “all you can eat” subsidy buffet for “green” energy per Biden’s horrendously misnamed “Inflation Reduction Act,” (among many other sources of funding), free-market advocates should assess and prioritize their relatively modest financial resources to combat this scourge and apply some basic triage to the situation. Otherwise, state by state, there may be no alternatives to “clean” utility generated electric energy relatively soon.
Consequently, society will lose the unique abilities of fossil fuels to cope with prolonged extreme weather to protect lives. Overreliance on R+B can result in deaths associated with multiple inabilities to cope with prolonged extreme weather events. Such extreme weather death counts will likely exceed premature death estimates due to Rush Island’s emissions. Maybe a high death from weather extremes is what it will take to change course. But that’s basically “betting the farm.” I’d rather not take that bet since it needlessly puts consumers at risk; especially those that are most susceptible to the massive/eventual ill-effects of politically correct “net zero” illusions.
A few weeks ago, Robert Bryce warned of the close call within New York State in an article titled Bone Chilling in which it was postulated that “Last Christmas, the U.S. narrowly averted an energy disaster that would have decimated New York City and killed thousands.” In February of 2018, I wrote an article published on MasterResource titled Warring Against Natural Gas: Joint EEI/NRDC Statement to NARUC (crony environmentalism at work). It portended the collusion between electric utility interests and AGW extremists through deep-decarbonization via electrification.
There is more bad news. On December 19, 2023, S&P Capital reported “Further rounds of US coal retirements loom over fresh reliability concerns.” There is no link because it’s behind S&P’s paywall but here is a similar link that isn’t blocked and warns that coal plant retirement estimates are higher than anticipated: Coal advocates warn NERC is underestimating plant retirements by about 68 GW, threatening reliability.
AGW advocates such as Sierra Club and NRDC are pushing securitization hard to basically bribe electric utilities with an opportunity to “have their cake and eat it too” through recovery of stranded fossil-fuel assets while simultaneously increasing rate base by adding expensive/unreliable R+B. All it takes is commission approval and they generally appear to get it more often than not.
There are also significant national security risks from overreliance upon an ever-growing and unreliable supply of critical minerals and materials. Making the US entirely dependent on a renewable energy monoculture largely controlled by and directly benefiting China. Assuming hostilities break-out, one electro-magnetic pulse (EMP) from a “weather balloon” and it’s literally “lights out.” Getting them back on can take months some estimate, and further estimates calculate death tolls in the millions.
At a minimum, China has a commanding presence in the global battery and photovoltaic markets. It behooves China for America to be a dependent market for their products. It also appears that at least some AGW extremists may be “watermelons” funded by the CCP. On December 18th, Fox News released the following: CCP-tied group is quietly fueling US-based climate initiatives. The group in question is the Energy Foundation. But the Energy Foundation is heavily funded by the MacArthur Foundation as is both the Sierra Club and the NRDC. Evidence:
I’m not implying that Sierra Club and/or the NRDC are directly funded by communist China. However, it does appear at least feasible that CCP funds may be co-mingled. More investigation is called for.
A utility executive once said (something to the effect) that utilities are the only industry where you can make a profit redecorating your office. That is the power of getting costs approved as “prudent” by public utility commissions so utilities can start earning their authorized rate-of-return. In the previously listed link at the beginning of this article to the presentation by Ameren to J.P. Morgan, Ameren appears to brag about their ability to get investments into rate-base.
The Missouri PSC should not be duped into allowing Ameren to securitize Rush Island and then replacing it with renewables as it will devastate low/fixed income consumers and do virtually nothing to affect AGW. At an absolute minimum, Rush Island should be mothballed so it can be brought back into service when (and not if) the fraudulent prevention of AGW through an all-electric energy monoculture comes crashing down. In addition, Rush Island, if it is retired, should be replaced with reliable and affordable fossil-fueled generation rather than overpriced, unreliable renewables-plus-batteries.
Summary & Conclusions
Forces against affordable, reliable free markets are gaining ground, to the massive long-term disadvantage of consumers and taxpayers. This is where the proverbial rubber meets the road for America’s energy consumers and economic sustainability concerns.
For the record, I’m not paid by anyone for what I write, Conversely, my writing probably led to my abrupt retirement from an energy company as my message apparently was not compliant with the ESG/DEI dogma that has become rooted in energy utilities. Nor am I paid for intervening in this rate case.
But I see where it’s headed and that’s more economic hardship from “Bidenomics” runaway spending on energy technologies and resultant inflation that do not and cannot serve the best interests of American consumers—especially low/fixed income consumers, which now includes me. By the way, the resultant stress from financial desperation from a collapsing economy can also kill (in many ways). “Divide and conquer” paves the way towards “thinning the herd.”
What this Ameren docket represents is the embodiment of “Beyond Carbon.” The thing is, it’s not working because it doesn’t work in the real world. For further reading about this real-world issue, please refer to the Real Clear Foundation’s newly released whitepaper; The Folly of Climate Leadership: Net Zero and Britain’s Disastrous Energy Policies. It provides the first in-depth study of Britain’s catastrophic net zero energy policies and makes the case of what to expect if the U.S. economy continues to follow Britain’s disastrous path. Besides, it will probably be shorter and easier to read than many entries in my MasterResource archives.
The moral of the story is that nearly 80% of U.S. electricity customers are served by utilities that have set a 100% carbon-reduction target. Realistic hopes for a smooth and affordable transition to “beyond carbon” are approximately nil and pursuing the false environmental claims of Bidenomics will devastate consumers and economic sustainability. It’s the energy and environmental equivalent of the Battle of Bến Tre: “It became necessary to destroy the town to save it.”
Given the technical advancements readily available for fossil fuel production and consumption, the “premature death” claims from incremental fossil fuel use pale in comparison to deaths that would occur from “electrifying“ everything when (not if) the grid collapses. While EMP-related collapse or solar flares are plausible causes for grid collapse, a deep and extended “polar vortex” seems the most plausible given we have already witnessed two near grid collapses in under three years: Namely, Winter Storms Uri (2021) and Elliott (2022). As of today, there appears to be another great storm coming: Winter Storm Gerri. In other words, such weather extremes are likely not to be worst case scenarios. Rather, they should be expected and planned for.
Finally, utility regulators may take some courage that not all state commissions are drinking the AGW extremists’ Kool-Aid. A case in point appears to be New Mexico Public Regulation Commission Case 22-00270-UT as evidenced below:
Again, however, more investigation is called for; specifically, to see how far securitization is being used nationally.
“Grass-root” efforts to combat such threats to free markets need funding. Please consider doing so. I am open to offers and/or suggestion. GoFundMe maybe?
Utility regulators are paid to balance the interests of utilities with consumers. That balance is not achieved by catering to the short-term interests’ of overly compensated electric utility executives to “transition” the whole of American society to an all-electric monoculture abetted by AGW alarmists who are also highly compensated for anti-energy wealth destruction (social justice, anyone?)
You have been warned.
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Mark Krebs, a mechanical engineer and energy policy consultant, has been involved with energy efficiency design and program evaluation for over thirty years. Mark has served as an expert witness in dozens of State energy efficiency proceedings, has been an advisor to DOE and has submitted scores of Federal energy-efficiency filings. His many MasterResource posts on natural gas vs. electricity and “Deep Decarbonization” federal policy can be found here. Mark’s first article was in Public Utilities Fortnightly, titled “It’s a War Out There: A Gas Man Questions Electric Efficiency” (December 1996). Recently retired from Spire Inc., Krebs has formed an energy policy consultancy (Gas Analytic & Advocacy Services) with other veteran energy analysts.
[1] From vol. 4 “Notes on Virginia,” Correspondence of Thomas Jeferson between 1782-1786. The following paragraph provides full context to the phrase:
Nor should our assembly be deluded by the integrity of their own purposes and conclude that these unlimited powers will never be abused, because themselves are not disposed to abuse them. They should look forward to a time, and that not a distant one, when a corruption in this, as in the country from which we derive our origin, will have seized the heads of government, and be spread by them through the body of the people; when they will purchase the voices of the people, and make them pay the price. Human nature is the same on every side of the Atlantic and will be alike influenced by the same causes. The time to guard against corruption and tyranny, is before they shall have gotten hold of us. It is better to keep the wolf out of the fold, than to trust to drawing his teeth and talons after he shall have entered.
[2] (Links at the end of Sierra Club’s summary go to the 8th Circuit Court of Appeals ruling and Sierra Club’s press release titled Ameren Missouri Escapes Paying Fully for its Pollution. Securitization has quickly become one of the leading strategies employed by the “clean energy” lobby to destroy fossil-fuel utilization in this country.
NOTE: Yesterday (January 10th), the Missouri PSC denied Krebs motion to intervene. The basis of the denial was:
The UK and Germany have both demonstrated the benefits of “mothballing” rather than scrapping coal generating stations.
Designing a grid based on “vaporware” such as long-duration batteries and Distributed Emission Free Resources is a high risk venture.
The electric utility industry has sought “all-electric everything” for decades, but it didn’t anticipate having to do it with renewables and storage on a tight schedule.
“Be careful what you wish for, because you might just get it.”
All good points Ed. However, I think electric utility “leaders” are fine with betting the farm on electrifying everything AND doing it primarily with renewables plus batteries. As long as they can get it approved and into rate-base, it’s not their money they’re betting. And when it all fails, it’s not their money that fixes it.
While “Commission Rule 20 CSR 4240-2.075” allows the MO PSC to deny those from the consumer/customer class they selectively deem “ordinary,” doing so seems tantamount to a 1st Amendment violation. Even more so if said consumer/customer is demonstrated to be a subject matter expert with unique and pertinent insight in the subject. The subject is scrapping a “used and useful” (and affordable/reliable) asset in order to load up an electric utility’s rate-base with something (that at least arguably) is more expensive and less reliable.
My open question to all is do I have a valid claim for a 1st Amendment violation?