Tuesday, August 11, 2009

SCC Votes More Cash for Virginia's Clunker of an Energy System

Last week, Virginia's State Corporation Commission issued a ruling on Appalachian Power's request to raise rates. It granted a partial rate increase to "recover fuel costs" (translation: higher cost of dirty coal), but rejected a rate increase for renewable energy:
The SCC also denied recovery at this time of the costs to purchase power from two wind projects that were not included in APCo's renewable energy program, which the SCC approved last year, because of the high cost of the purchased power.
According to the Roanoke Times, the recession played a major role for the commission:
The SCC attributed the fuel rate reduction to "several legal and factual findings" related to Appalachian's application and associated testimony. But it also referenced economic struggles of the utility's customers.
America's energy policies are a seesaw:
  • We can't get off fossil fuels when the economy is bad, because even though energy prices tend to be low, we're told already-stressed consumers can't possibly bear even another cent of short-term transition cost to clean energy.
  • But when the economy is good, we're told we can't get off fossil fuels because energy prices are so high, already-stressed consumers can't possibly bear any risk of even another cent of short-term transition cost to clean energy.
Of course, we don't stay on the seesaw by accident. It's a choice. As the Roanoke Times reports, there's a subjective decision here from the SCC commissioners, two of whom were appointed by Gov. Tim Kaine:
By Virginia law, Appalachian, a subsidiary of Ohio-based American Electric Power, is entitled to recover, dollar for dollar, "prudently incurred fuel costs." Coal is Appalachian's primary fuel. The fuel factor formula also includes costs for purchasing power from other utilities.
So even though the price of coal keeps spiking, even though coal employment keeps plummeting, even though burning coal pollutes our air and is one of the main drivers of global warming, even though mountaintop removal is literally changing the face of southwest Virginia forever, the costs of coal-fired power are "prudent." And even though the price of wind power keeps dropping, even though wind power promises sustainable jobs, even though wind power is pollution-free and protects Virginia's natural resources, wind power is apparently of limited prudence in the eyes of Virginia's SCC.

Are there going to be some transition costs to clean energy? Of course. If you have a broken-down car, there are going to be transition costs to buy a new one. At some point, you have to stop throwing good money after bad in repairing your old car and decide to make a fresh start. If we don't, we'll be handing our kids the keys to what's basically the same jalopy we've been driving since the 19th century. But instead of investing in a new direction, Virginia's SCC has voted to give more cash to our clunker of an energy system.

I asked an Appalachian Power spokesman about the decision:
The SCC denied recovery "at this time" of the costs to purchase power from our wind projects in the current fuel factor that will be in place through August 2010. This does not preclude Appalachian from seeking recovery of these projects through other means in the future.

The wind projects were Beech Ridge, in West Virginia, and Grand Ridge Illinois. A portion of the wind from Camp Grove in Illinois and Fowler Ridge in Indiana are being recovered.
Let's hope Appalachian Power continues their push for more wind power projects. They certainly didn't get any encouragement in their effort this month from Gov. Kaine's SCC.

Cross-posted from Blue Virginia
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