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Protecting Grid Reliability Now, So We Don’t Regret it Later

Last week, the Senate Committee on Energy and Natural Resources held a hearing on electric grid reliability concerns—something that was definitely necessary after a series of Wall Street Journal articles came out highlighting the vulnerability of the grid if there were to be a coordinated attack in conjunction with internal analysis from the Federal Energy Regulatory Commission (FERC). While those that normally contribute to the discussion of grid reliability were well represented, it was notable that EPA was absent from the hearing.

This winter was one of the coldest we’ve had in a while, and the changing temperatures all but gave us whiplash. Thanks to coal-based electricity, however, none of us truly suffered the bite of Old Man Winter as the power stayed on. The same may not be true this summer when coal-fueled plants that were running at full capacity this winter come off line due to EPA regulations. In fact, we could all be in for a rude awakening when rolling brownouts and blackouts begin this summer due to an overreliance on one fuel source that is just not capable of meeting demand in real time.

In terms of generating electricity, coal-based power has some general advantages over natural gas that are magnified under conditions like the polar vortex. Natural gas is a “just-in-time fuel”, piped in as power plants use it – so pipeline disruptions due to a drop in temperature or spike in demand impact generation in real time. Coal, on the other hand, is stock-piled at the plant and generally not subject to such disruptions. Further, the price of coal has remained historically steady, whereas the price of natural gas has been much more volatile. Moving forward, we can expect that the price of natural gas will continue to rise much more rapidly than the price of coal. EIA projects that real natural gas prices for electric power generation will increase three times more than coal over the next 20 years.

Since American Electric Power (AEP) ran about 90% of its coal plants that are set to retire in 2015 to help meet demand through the coldest days of winter, it makes you wonder why people want to eliminate the most reliable form of electricity. Further, it begs the question as to why EPA isn’t front and center at a hearing on reliability when its regulations will be responsible for all but ensuring an unreliable grid and higher electricity costs for all.

There’s still time for you to tell EPA that you want a reliable source of affordable electricity. Visit www.EPAregscostjobs.com today and make your voice heard.

 


Coal has been a constant for ACCCE head in a varied career

The article “Coal has been a constant for ACCCE head in a varied career” originally appeared in CEO Update on November 15, 2013.

Mike Duncan says some of his earliest memories concern coal. Both grandfathers, at various times, were miners. After 67 years, his dad still has a country store in Kentucky where he sold supplies to miners when coal was booming in Central Appalachia, where Duncan has always made his home.

After law school, he and his wife bought a controlling interest in a Kentucky bank. For 40 years, they lent money to small coal companies and miners themselves. He’s back in Appalachia often, recently visiting along with six staffers. “It’s part of the culture. I’m trying to make sure that they understand a little bit more about the groups that we represent.

Duncan came to ACCCE in 2012 after a career that took him from small-town banking to big-time politics. Active in Republican politics for years—at county, state and national levels—he was chairman of the Republican National Committee from 2007-2009, and in 2010 was founding chairman of the American Crossroads Super PAC. Along the way, President George W. Bush had named him to a term on the Tennessee Valley Authority board.

“Of course coal was part of the mix,” he said, along with nuclear and hydroelectric power.

He talked to CEO Update about steering ACCCE (See Preparing for transition can prevent staff turnover from becoming toxic), his entry into associations and his political background. Excerpts follow:

CU: How did the job at ACCCE come about?

MD: I was looking to go on another corporate board after my Tennessee Valley Authority board [post] expired, something in the energy space. I’d learned a lot during that period of time, so I had a skill set that was kind of interesting, and I was young enough and I thought, well, this might be an interesting thing to do, so I started talking to some of my friends. One called me and said, “Hey, I’ve got something for you,” and I thought it was probably an energy board of some kind. They said, “No, there’s this association that you really need to look into,” and I said, “Well, I’m not interested in being a lobbyist.”

[But] I’ve worked on causes all my life, and he said, “Well, this is a cause that you’ll feel good about.” And he submitted my name to [executive search firm] Russell Reynolds. Then I was contacted and did the interview process and learned it was something I did have a passion about, because it was the whole idea of coal and coal-based electricity, which means that the utilities were involved, and then, the third part was the rail.

We are a little different than an average coal association. We’re a coalition of coal companies. They’re represented by their own association here in town [National Mining Association]. And we’ve got the railroads—[Association of American Railroads CEO] Ed Hamberger does a great job representing the railroads. Then, you’ve got the investor-owned utilities, and we also have co-ops as part of our group, and the utilities. We also have as the final component, manufacturers, vendors who supply the chain. So ACCCE was created.

CU: In leading this coalition, you have different constituent groups in a way. Is there some analogy to the RNC?

MD: Well, I think everything you do in life prepares you for the next step. Certainly, being at the RNC was great preparation. There, I was a member first, then a southern regional vice chairman. Then, I was elected treasurer, then confirmed as general counsel, and then President [George W.] Bush asked me to be chairman. I’ve worked with almost every group within the RNC, so managing coalitions really is an important part.

Beyond that, I spent a year studying—when I worked at the White House for Bush 41—the difference between private enterprise and government, so had classes at [Harvard's] Kennedy School. Working in the nonprofit sector is analogous to that. It’s not private sector, and it’s not government. It’s somewhere in between, but it’s managing those expectations of different groups, so all those things, I think, prepared me.

CU: And you had association experience. You were head of the Kentucky Bankers Association.

MD: I was. It was a great experience for me. I was the youngest bank CEO at one time, and then, I was the youngest president of our state bankers association. I was 26 when I became CEO of a community bank. Then when I was president of the Bankers Association—gosh, that was in the mid-’80s, so I was in my early 30s—it fell upon me to head the association during a time when they were looking for a new CEO. The guy who had it for many years decided to retire, so a big part of my job that year was to prepare the association for the transition.

We were trying to go from a dues-based organization to a service-based organization, and I learned a great deal about associations. During that period I wasn’t the day-to-day officer, but I had to immerse myself in the daily activities of the association during the interview process, and I’m proud to say that the person that we hired is still there all these years later.

CU: How did you get involved in politics?

MD: I grew up on the Tennessee-Kentucky border. Our business was in Kentucky, and our farm was in Tennessee. I had an uncle who ran for superintendent of schools. It was an elected position then, and I went with him every day he campaigned one summer, and we lost by 12 votes. Of course, it broke my heart, but I learned a great deal, and I was hooked. Also, in this little community, former Sen. Howard Baker resided there, and his father was a congressman. His father and my uncle knew each other, and I thought everyone was interested in politics because I was in a hotbed of political activity. So my roots in politics go back a long way, and I think prepared me for the debate that was going on in leadership positions, understanding structures and understanding moving organizations forward.

CU: What are some of the policy challenges this association is facing?

MD: I believe that the EPA sometimes misreads the acts, and in this instance I think they have misapplied the Clean Air Act, and how it should be interpreted. I think the fact that they’ve come out with a new source of standards for new power plants to be built has done a couple things while they’ve gone through the process. It’s frozen any new plants because of uncertainty in the capital market, and I think now that they have a proposal out for comment that will create a de facto ban on new coal plants in the country, because it’s established a standard that’s not achievable. I believe their policy will be counterproductive in the fact that it will discourage people from making investments.

When I was a young man, I remember seeing Los Angeles for the first time or even Cleveland and seeing the dirty air there. We’ve cleaned up a lot of that, and where they’re going with their new standards, if you did away with all the coal plants in the country—which would be a terrible shock to our system for reliability, for affordability, it just it wouldn’t work, but let’s say you did—all you’re doing is getting rid of 3 percent of the CO2 emissions worldwide.

CU: How will you respond to this challenge?

MD: First of all you have a consensus as to what the message is, and with a coalition, you’ve got to listen to everybody, then you educate as many people as you can. Then, you advocate your position in many different ways. You advocate it on a federal level, but primarily, the fight is getting ready to go to the states. Because as the government goes through this process that the president has outlined, it’s very tight process. And this is a legacy issue for him. He wants to get it done during this period of time—there’s not a lot of room on the other end for a thorough debate.

Now we’re on this end up here where we’re having hearings—we believe they’re having them in the wrong locations because the states where they’re having the hearings only average 26 percent of their electricity from coal. And states that have a high percentage of coal, they’re not having hearings there. So we’re arguing with them on process. We think that it’s disingenuous.

Then, they next will come out with regulations or proposals on existing plants. Then, the states will have a chance to talk about that and work on that, and then, there’ll be a plan that comes out of the Federal Register. That will be given to the states as guidelines, and states will have to comply, and they have to do this all before 2016.

So we want to make sure everybody understands that there are tradeoffs. If you create this system, it’s not going to be uniform all over the country. A lot of places that have competitive advantages now, and have manufacturing, their electric rates will go up dramatically. We have to make sure that the policymakers understand what these tradeoffs are.

CU: When you’re working with policymakers, your group is working with both parties. How do you transition from former RNC chair to this bipartisan role?

MD: I think I was able to do that because of the passion I have for the issue and the people involved. I think the fact that I grew up in coal country, that I have an affinity for the people there, that I understand it so well and that I don’t see it as a Republican or Democrat issue. Flipping the switch on should not be [a partisan issue], or having a national energy policy that gives you national security.

I think if you go back and look at some of the quotes when I was hired here from Howard Dean—Howard and I served as chairmen together—and some of the other Democrats I worked with over the years, they’ll tell you I have the ability to understand policies and to work for solutions. I don’t know the political affiliation of everyone in the organization, but I know some of them are Democrats.

CU: Has anything in this job surprised you?

MD: Well, there’s a learning curve. I subscribe to this idea that it takes a period of time for you to maximize your effectiveness in any organization, and there is a learning curve with ACCCE, not only the people involved internally and externally, but the nuance of the issues. One of the good things about a job like this is every day is different. Sometimes you’re advocating, and sometimes you’re managing, and you’re educating. But sometimes you’re working on budgets.

CU: Did you ever consider running for office?

MD: I did early, but it just wasn’t the thing that motivated me. At different times I looked at it, and I would say, well, for this business reason or family reason, this is probably not the best thing for me to do. But I hope that I continue working, and I hope that I continue to have—this is your money quote—meaning and adventure in my life. That’s what I teach my interns to look for.


Join us!

Energy jobs and affordable electricity in America are critical to a stable economy and bright energy future.  Sadly, however, the administration has set its sights on the coal-based electricity industry and if successful in its quest to power down America, businesses, energy employees and consumers across the nation will pay the price through lost wages, lost jobs and higher energy bills.

On October 29th, 2013 we will be standing up for American energy jobs and affordable electricity at the U.S. Capitol and hope you will also make a stand.

Join ACCCE, Members of Congress and energy and manufacturing workers from across the country for a rally on the West side of the U.S. Capitol from 11:00am to 1:30pm. This is your opportunity to make your voice heard!

Devastating regulations have been proposed by the federal government and your opinion matters. Tell the administration that the hard working people of the United States will not tolerate having their jobs and way of life put at risk.

Don’t forget to put October 29th on your calendar and make plans to be in D.C. to join your fellow energy workers.  If you can’t make it in person, please ACT NOW by telling the EPA that government overreach is hurting American jobs, affordable electricity and the American economy.

See you soon!


Dale Jr. Visits State-of-the-Art Clean Coal Mine in Pennsylvania

Dale Earnhardt, Jr., America’s most popular NASCAR driver, recently toured CONSOL Energy’s Enlow Fork mine which is a part of the Bailey Mine Complex, the largest underground mine in the world and one of the most advanced and safest mines ever built. The complex produces nearly 20 million tons of coal each year.

Dale Jr. saw up close how CONSOL is using cutting edge technology on the front end of the process to produce clean coal electricity. The Pennsylvania mine is a vital asset to America’s energy future as it provides the first step towards delivering affordable electricity to businesses and families.

As ACCCE President and CEO Mike Duncan stated, this CONSOL Energy mine “is a true marvel of modern engineering” and shows how the coal-based electricity industry has pioneered “innovations in the realm of safety and beyond.”

After visiting the mine, Dale Jr. said, “Coal is an essential fuel for electricity production and coal keeps electricity prices down. America’s families and businesses rely heavily on affordable and reliable coal–from manufacturing to motorsports and everything in between.”

While at the mine, the 19-time NASCAR winner spent time talking with CONSOL employees and guests, signing autographs and taking pictures.

Jimmy Brock, CONSOL Energy’s Chief Operating Officer of Coal Operations, said “Dale Earnhardt Jr. and his team are one of the elite groups in racing and we are honored to host them. NASCAR is a great way for our industry to reach out to American families about the important role coal plays in delivering affordable power for the American economy. Many of our miners are NASCAR fans and it was a special day to host Dale Earnhardt Jr. We are excited to have him here today to learn about how coal keeps electricity affordable, reliable and increasingly clean.”

Stand with Dale Jr. and millions of Americans. Go to EPARegsCostJobs.com today and tell the EPA that clean coal technology means affordable energy and American jobs.


High-Tech Coal Comes to Indiana

A new 21st Century coal plant utilizing state-of-the-art technology began running today in Knox County, Ind., says Duke Energy Corp. to E&E.

The Edwardsport Generating Station will replace older coal plants and offers immediate environmental benefits. “The 618-megawatt integrated gasification combined cycle Edwardsport plant will produce more electricity but about 70 percent less sulfur dioxide and nitrogen oxide emissions compared with the plant it is replacing. The new plant will cut greenhouse gas emissions by half, ” reported E&E.

Clean coal technology has become a commercial reality in states like Indiana, where coal has powered the state for “more than a century,” said Doug Esamann, president of Duke Energy Indiana. Other high-tech facilities, like the John W. Turk Power Plant in Arkansas, showcase the benefits of clean coal technologies. The plant, which generates “electricity more efficiently at higher temperatures, requiring less coal and producing fewer emissions to generate the same amount of power as existing coal units,” is the first ultra-supercritical generating unit to go into operation in the U.S., as reported previously by ACCCE.


Nevada in Danger of Higher Electricity Rates

In this tough economy, Nevada must produce electricity at a price families and small businesses can afford.

One bill, SB 123, being considered right now by the Nevada State Assembly, would increase utility rates across Nevada and guarantee higher profits for NV Energy, the state’s biggest utility. Additionally, SB 123 would require ratepayers like you to foot the bill for both replacement power plants and the idle power plants that will be shut down early.

Worse, the bill would undercut consumer protections by circumventing the normal approval process at the Nevada Public Utilities Commission.

Read the Las Vegas Review Journal’s editorial on the bill and if you’re a Nevada resident, call your State Assemblyman today and urge them to vote NO on SB 123. Thank you for your support!

 


The EPA Must Answer for its Back-door “Sue and Settle” Deals

An article from the Washington Examiner has decried the EPA’s continued use of “sue and settle” tactics which allow for closed-door deals to be made and ratified without any sense of transparency to the public.

The “sue and settle” process occurs when a private environmental group sues the EPA in federal court seeking to force the EPA to issue new regulations by a certain date. Then, the agency and group officials meet behind closed doors to hammer out a deal; typically, in the deal, the government agrees to do whatever the activists want. Most importantly, the last step occurs when the federal judge issues a consent decree, thus making that deal the law of the land.

Since 2009, the EPA has reached such closed-door deals with the Sierra Club 34 times and have worked under a “settle and sue” process with another environmental activist group, the WildEarth Guardians, 20 times. The article poses the question as to why the agency isn’t seeing the public rebuke that this type of shady interaction warrants, citing that the U.S. Chamber of Commerce noted in a comprehensive new report that “several environmental advocacy groups have made the “sue and settle” process a significant part of their legal strategy,” with the article adding that this process is also “a significant funding tool,” for the agency, as in most cases, the suing group’s legal fees are paid for by taxpayers.

All of this occurs outside of the public eye, without congressional hearings or the opportunity for anyone outside of a privileged few to know how new governmental regulator policy is being shaped until it’s already ratified and too late to for any changes to be made. This process is intrinsically anti-democratic and scoffs in the face of any sense of transparency or accountability in the government. It is essential that we repeal “sue and settle” and bring transparency back to all government happenings.

Head over to Twitter and tell @EPAgov to repeal “sue and settle.”

 


New Technologies Demand Better Policies

Originally posted on National Journal’s Energy Expert Blog :

When it comes to coal, technology is a game-changer. Over the past several decades, emissions from American coal plants are down 90 percent thanks to the more than $100 billion dollars invested in new technologies by America’s coal industry. Unfortunately, the policies coming out of the federal and many state governments do not reflect the transformation occurring in our industry.

The EPA and some state agencies frequently take the bait laid by special interest groups promoting a political agenda that ignores the role that technology has played in making sources such as coal cleaner than ever. They overlook the fact that affordable and reliable electricity impacts not only our nation’s economy, but also the family budget.

So instead of pursuing balanced policies that protect the environment and strengthen the economy, we end up with excessive policies that seek to limit America’s energy options. This is evident with the Nucla Power Plant in Colorado. Thanks to new technologies, this is one of the lowest mercury-emitting coal plants in the country. Yet the EPA’s new rules on mercury could shut it down. This is not an isolated problem. A recent published report found that more than 280 coal-fueled generation units are scheduled to be shutdown due at least in part to EPA regulations.

This is happening at the state level too. In Colorado, some state legislators are seeking to more than double the renewable energy standards for the state’s utilities, which would increase costs for consumers. The city of Los Angeles is proposing to move the city away from coal-based electricity two years before a state-imposed deadline. Last month, the city’s ratepayer advocate reported that such a move could cost more than $600 million dollars.

Responsible policymakers recognize the promise of clean coal technology, and pursue policies that allow American to take advantage of our massive volumes of coal. Much progress has been made in clean coal technology, but the future is even more promising. Last month, GE Power and Water unveiled a new filtration technology for coal plants that is both stronger and more efficient. Earlier this year, researchers at Ohio State University were able to run a scaled-down coal plant while capturing 99 percent of carbon dioxide.

Twenty-first century technologies demand 21st century policies. Instead, we’re getting a stream of policies based on 20th century policies. Coal and clean coal technology must play an important role in meeting our future energy demands. The question is our government pursuing the balanced approach necessary to ensuring that it can?