Better Plan, Wisconsin

THE BIG IF

Better Plan takes a closer look at some of the expert testimony on the Glacier Hills Docket.

Today's testimony comes from Jerry Mendl who was hired by Clean Wisconsin to evaluate the effectiveness of the Glacier Hills wind farm at reducing greenhouse gas emissions, particularly CO2.

(NOTE: Mr. Mendl served at the Wisconsin Public Service Commission as Director of the Bureau of Environmental and Energy Systems and also as Administrator of the Division of Systems Planning, Environmental Review and Consumer Analysis. Learn more about Mr. Mendl by clicking here)

[download Mr. Mendl's complete testimony by clicking here]

His testimony is frank and full of surprises, the greatest of which is this:

Unless WEPCO fully retires a coal plant, the Glacier Hills wind farm will not reduce Wisconsin's CO2 emissions, and could in fact, increase them. [1] [2] [3] [4][5]

(We were unable to find any indication that WEPCO wishes to completely shut down one of its coal-fired plants, or that they would be obligated by the PSC to do so.)

Other findings from Mr. Mendl's testimony:

WEPCO does not need additional capacity until 2024. Regardless of whether it builds Glacier Hills or other RPS facilities, WEPCO will have excess capacity through 2024 which it intends to sell. Additional capacity clearly is not needed to serve the projected load and reserve margin. [1] [2]

 Because WEPCO intends to sell the excess capacity and energy it produces, it is likely that the CO2 emissions will not be reduced from Wisconsin plants. [3]

Unless WEPCO agrees to take a coal-fired plant off line, the net result of building Glacier Hills to comply with Wisconsin RPS requirements and selling the excess capacity will be little to no reduction of CO2 emissions. The Glacier Hills wind farm itself won’t reduce CO2 emissions unless WEPCO retires a coal fired plant. [3]

NOTE FROM THE BPWI RESEARCH NERD: Another surprise in this testimony involves  shutting down the Glacier Hills wind turbines in the summer in order to maintain profitability by burning coal instead. On page 18 of the testimony we find this:

 Q. Did your analysis raise any concerns that the Commission should consider?

A. Yes. The analysis suggests that particularly in the summer months, when strongly negative LMPs [locational marginal price] can occur, it would be in the economic interest of the wind generator to shut down the wind turbines, which have zero fuel cost and produce no CO2; and instead operate coal plants that incur fuel costs and generate CO2. In essence, the way the MISO market works, free energy with environmental benefits is too expensive!

Q. What can the Commission do about that?
A. A Commission requirement to retire one or more coal units would help mitigate this occurrence.

     As far as Better Plan can tell, WEPCO has no intention of retiring a coal-fired plant and every intention of selling the excess energy. This is understandable in terms of a business plan where profit is the goal.

However if reduction of CO2 emmissions in Wisconsin is the goal, our question to the PSC is this:

What is the benefit of the Glacier Hills wind farm in terms of CO2 reduction to our state if WEPCO does not retire a coal plant?  

If there is no CO2 benefit and if WEPCO has excess capacity until 2024 without the Glacier Hills wind farm, how can the PSC justify granting a Certificate of Public Need and Convinience?

The PSC is now taking comments on the Glacier Hills EIS. If you'd like to comment on the lack of reliable CO2 reduction from this project , CLICK HERE To review the entire docket for this project CLICK HERE and enter docket number 6630-CE-302.

References from the testimony document: [download complete testimony by clicking here]

[1] P3:1-13. "Reduction in greenhouse gases, including CO2, is an important purpose of the Renewable Portfolio Standard (“RPS”) law that underlies the Glacier Hills proposal. The effectiveness of Glacier Hills project in reducing greenhouse gases can be best ensured if the Commission requires WEPCO (and other utilities in future RPS projects) to plan for corresponding retirements of  existing coal capacity.

4. The opportunity to retire excess capacity exists because WEPCO, even without Glacier Hills, does not need additional capacity until 2024 under the updated forecasts that WEPCO witnesses relied upon for their supplemental testimony. When one adds Glacier Hills and additional wind generation to meet WEPCO’s RPS standard of 662 MW by 2015, WEPCO will not need additional capacity until at least 2026. Thus, it is clear that WEPCO could retire at least 100 MW of existing coal generation."

[2] P.5: 2-22  Q: Will the operation of Glacier Hills result in WEPCO having excess capacity?
A. Yes. According to its application in this docket, as amended by WEPCO’s updated forecast and supplemental direct testimony, WEPCO will have excess capacity through 2024, regardless of whether it builds Glacier Hills or other RPS facilities.

Q. Does WEPCO plan to sell excess accredited capacity?                                                                            A. Yes. Although WEPCO has not identified specific plans, it has indicated that it intends to sell all capacity over the 14.5% reserve margin prior to each planning year. It has done so for 2009.

[3] P.6:17-20 Q:What effect would WEPCO’s planned sale of excess capacity have on the emission of greenhouse gases from WEPCO’s power plants?

A: If WEPCO sells the excess capacity and energy it produces, it is likely that the CO2emissions will not be reduced from Wisconsin plants. WEPCO’s EGEAS runs show a decrease in CO2 emissions to supply electricity used by WEPCO’s customers. However, if the purchaser of the excess capacity takes energy at levels equivalent to or greater than that forecasted by WEPCO for its own loads without Glacier Hills, the net CO2 emissions from WEPCO plants would not be reduced and may be increased.

[4] p.14:1-15 In concept, Wisconsin utilities may install renewable resources to meet the RPS objectives and to reduce greenhouse gases, and MISO could then dispatch the resources available without reducing the utilization of Wisconsin coal-fired power plants. In this example, Wisconsin’s CO2 emissions would stay the same, although MISO dispatch would reduce the utilization of power plants elsewhere in the MISO 5
footprint.
Q. Should that be a concern to this Commission? 7
A. Yes, for at least two reasons. First, if MISO dispatch displaces a highly efficient natural gas fired combined cycle plant with generation from Glacier Hills, the effectiveness at reducing CO2 emissions will be far less than if MISO displaces a relatively inefficient coal-fired unit with much higher CO2 emissions per kWh.
Second, if CO2 emissions by state are ever used as a benchmark of global climate change performance, Wisconsin would be identified as an underperformer because MISO dispatch produced CO2 in Wisconsin plants, even though the energy was consumed elsewhere.

[5] P.18: 8-16 Q. Did your analysis raise any concerns that the Commission should consider?
A. Yes. The analysis suggests that particularly in the summer months, when strongly negative LMPs can occur, it would be in the economic interest of the wind generator to shut down the wind turbines, which have zero fuel cost and produce no CO2; and instead operate coal plants that incur fuel costs and generate CO2. In essence, the way the MISO market works, free energy with environmental benefits is too expensive!

Q. What can the Commission do about that?
A. A Commission requirement to retire one or more coal units would help mitigate this occurrence.