Rate "Decoupling" in NC

Recently, at our annual conservation forum, Ivan Urlaub of the North Carolina Sustainable Energy Association gave a quick and thorough rundown on "rate decoupling" and the political feasibility of different strategies to bring it about in a gas and electricity regulated state.

As Ivan explained, our current regulatory policies are price and reliability driven. The investor owned utilities in NC - Duke Energy, Progress Energy, Dominion/NC Power - are regulated monopolies with a guaranteed profit margin, which in turn encourages and fosters a regulatory structure that is volume based. By selling more power, the regulated utilities earn higher revenue, which is good for shareholders but undoubtedly bad for energy efficiency and conservation efforts (but that's a separate post).

Rate decoupling is a way of talking about changing the current rate structure, a difficult conversation when you're talking about guaranteed profit margins. Which is why, in NC, there are basically five overall policy options, with the lowest being the most easily attainable:

1. Reform regulatory rate structure entirely
   
2. Implement technologies that provide customers with clear, easy to understand price signals and consumption information
3. Funding/financing for efficiency efforts that maintain utility profits.
4. Third party administered fund for energy efficiency, outside of utility control.
5. Incentives for consumers to adopt EE.
   

Rate decoupling is essentially a tool to separate a utility's revenue from energy sales. The way things are, regulated utilities have, as Ivan said, "a disincentive" with regards to efficiency efforts. You can watch video of Ivan's presentation on our Facebook page or check out all the presentation's from that day on our website.

Last day to comment on Titan Cement

Along the banks of the mercury impaired Northeast Cape Fear River, Titan America plans to build the fourth-largest cement plant and limestone mine in the country. Proposed emissions: over 140 hazardous and toxic air pollutants including mercury, particulate matter, nitrogen oxide (NOx), and sulfur dioxide.

That's all in the draft air permit, over which the public comment period ends today. Inextricably linked with the public health and water quality issues is the rapid pace the state has taken with the permitting process.

As our Cape Fear group chair wrote back in September, normally a project of similar size and scope would trigger the NC Environmental Policy Act (SEPA). SEPA is triggered when the following conditions are met: (1) state permitting is needed for the project (2) the project will have significant environmental impact, and (3) public money has been accepted by the company. All conditions seem to apply to the proposed cement kiln in Wilmington. Titan has claimed that though they accepted $4,000,000 in public money, it doesn't apply to Point 3 because the funds are technically a reduction in taxes after the project is completed. The North Carolina Department of Environment and Natural Resources (DENR) originally determined that SEPA applied, but subsequently rescinded.

And there's more, of course. The US EPA currently has draft rules w/r/t emissions from cement kilns, and the maximum limit laid out in those rules would be exceeded by the permit granted to Titan America by the state of North Carolina. As the Charlotte Observer put it: "The state has put the cart ahead of the horse..."

Update: In a letter dated November 18, 2009, Joe Sinsheimer asked Governor Perdue for "a 90-day freeze on the Titan Cement environmental permitting process," among other things. You can read the letter and analysis at the News & Observer. In an interview, the Governor stated in response that she would look into Sinsheimer's concerns, and said specifically regarding Titan Cement: “I have asked the attorney general’s office, the SBI, to see if there was any kind of — I don’t know the word, I’m not a lawyer — if there was anything that wasn’t aboveboard in the decision making, and I believe they will.”

NC's role in national climate debate

Cathy Duvall, Sierra Club's National Political Director, spoke last night in Chapel Hill about the future of climate legislation on Capitol Hill and the role North Carolina might play in the vital debate. A sizable crowd filled 3 Cups to the brim to hear how Sierrans can play a major role in breaking the stranglehold that utilities hold over the South and bring about real change.

With Congress back from its August recess, the debate on Waxman-Markey and Barbara Boxer's (D-CA) expected companion legislation in the Senate will head towards resolution. Senators from the South - Kay Hagan in particular - will play a key role in the success or failure of the bill.

Intermodal Bill now law

Apple Server Farm

Earlier this summer, Apple selected Maiden, North Carolina, as the future location of a massive new server farm. Mass speculation continues to this day over its purpose (re: with no search engine, what's it for?) - iPhone Apps? Cloud computing services like MobileMe or the iTunes store?

Regardless of its unannounced purpose, here's what we know from published reports.

Size.

183 acres. Development of the one billion dollar, 500,000-square foot building was scheduled to begin as early as August, but we've yet to see any word that construction has broken ground.

Energy Use.

The numbers on this, unfortunately, are all over the map. It's hard to tell which sources are speculative...so, a few key points.

1. A similar 174 acre server farm built in California uses 180 megawatts of energy, enough to power all the homes in Honolulu. But that was back in 2002.


2. The buildings need to stay around a temp of 68 degrees, so air conditioning in these buildings, especially in the South, are large power drainers.


3. From Data Center Knowledge: County officials have also been working with T5 Mission Critical Facilities, a company formed recently by former members of the data center practice at the Staubach Company. T5 is developing a site near Route 321 in with an existing 150,000 powered shell with up to 120 megawatts of power available for a single large user. The company says the power from Duke Energy is priced at 3.8 to 4.4 cents per kWh.

(so, by this estimate, they'll at least be taking in 120 MW at a negotiated price)
4. A large water project in nearby Hickory will also help cool the plant.
5. Another interesting quote about location and energy use:
   "That parcel was a winner because it has access to large amounts of power and water and both primary and backup supplies of each, he said.
   
   That redundancy will be key to keeping Apples' many computer servers powered and cool, even if there is a storm or water-line break.
   
   A 36-inch water line from Hickory runs 2,000 feet from the site and a new, smaller loop line in the same area will provide backup service. Duke Energy also has two major lines running south from Hickory and north from Lincolnton.
   
   The data center will use about 20 megawatts annually – enough to power 16,000 homes."