The second may actually be the more serious in the long term, given today's political environment on global warming issues.
A George W. Bush-appointed Federal district court judge has blocked enforcement of California's greenhouse gases law, the much-trumpeted effort that folks like oil companies have previously tried to kill by ballot initiative.
This time, it's the ethanol folks, and getting a win, at least for now.
Judge O'Neill said that this was interference into interstate commerce.
But ... given that California has latitude for tougher state standards on car emissions than national EPA standards, given that courts have ruled EPA can indeed regulate CO2 as a pollutant, and given that a major source of CO2 is either cars running on various sources of CO2 emissions, or power plants from out of state supplying part of California's electricity, I'm halfway hopeful the judge's injunction will get overturned by the Ninth Circuit. But, this one could wind up at SCOTUS level.
The other? A federal appeals court has blocked enforcement of the EPA's new mercury rules. And, in a "shock me," this is the legal action pushed by Luminant, aka the power generating part of the former TXU, and the state of Texas.
Why does Rick Perry hate kids near power plants?
And, Luminant says now that coal plants it was going to mothball Jan. 1 will keep running instead.
So, it has admitted it can live without those plants, it just doesn't want to.
Showing posts with label Luminant. Show all posts
Showing posts with label Luminant. Show all posts
December 30, 2011
December 04, 2008
Texas cities should look former TXU gift horse in mouth
Guaranteed low electric rates for 24 years? Sounds too good to be true, doesn't it?
Well, electric power generator Luminant is presenting what claims to be the real deal, and Cedar Hill, Duncanville and Grand Prairie are among cities that have signed up.
But, the hidden costs of these and other cities getting a minimum of 60 percent of their electricity from coal-burning power plants - hidden costs that could include increased carbon dioxide and mercury emissions - say that maybe this is too good to be true, or at least is a gift horse that needs further examining.
First, the trader of that gift horse needs a closer look. Luminant is what were the electric power plants of the old TXU. That's before leveraged buyout artist Kohlberg Kravis Roberts, profiled in the movie “Barbarians at the Gate,” along with Texas Pacific Group and Goldman Sachs, acquired TXU about two years ago.
Now, TXU wasn't exactly in the charity business even before the leveraged buyout. KKR never has been charitable, as the movie I mentioned documents. And, anybody watching current Treasury Secretary and Goldman Sachs alumnus Henry Paulson in the past month or two knows that he (and his company) are not known for befriending the little guy or paying attention to Main Street instead of Wall Street.
The three cities above, and others, have joined Cities Aggregation Power Project. If enough cities join the deal, CAPP cuts Luminant a check for $465 million. In exchange, they get 60 percent of their electricity at a fixed rate, on a 24-year contract, starting at a cheap $7 a kilowatt-hour.
Luminant needs the money. It has leveraged buyout debt, and anybody who's watched Crazy Uncle Henry Paulson's roller coaster knows that, these days, an antsy debtor can get an itchy trigger finger to call in debt.
In addition, Luminant has three new coal plants coming on line, and debt from them to pay off too.
Luminant gets well more than half of its electric generation from natural-gas plants. But, it's offering cheap (not allowing for any loopholes) power to cities that don't have a problem getting the majority of their electricity from relatively dirty coal.
The rates are cheap enough that it looks almost like bribery-level offerings to get CAPP cities to help Luminant pay off its leveraged buyout debt before some creditor in today's credit-tight world starts calling in notes.
Also on the financial side, the leveraged buyout trio promised to keep rates low through Š wait for it Š the end of 2008. I'm sure Luminant is going to be beating the bushes hard for new city customers for the next four weeks.
If enough cities sign up to launch CAPP, who knows what the price will be down the road on the 40 percent of power that's sold at floating rates?
Beyond that, there's the issues of air quality and global warming.
First, global warming. Coal emits a lot more carbon dioxide, the most common human-generated greenhouse gas, than does natural gas. Many inside-Washington environmental analysts expect some sort of national carbon dioxide emissions cap-and-trade program to come out of the Obama Administration, and relatively soon.
How much that will affect coal-fired electric costs, and how much of that cost Luminant would try to shuffle over to the 40 percent of the electricity it will provide CAPP cities at floating rates, is unknown. But, the fact that this thumb could potentially come down on the price scale means the CAPP deal may not be quite so cheap as billed.
Meanwhile, Luminant's four dirtiest power plants are estimated to be responsible for 5 percent of all mercury pollution in the United States. Luminant says it's working to clean up its plants, but didn't we hear that from the old TXU years ago? Just as pre-buyout TXU wasn't a charity, it wasn't exactly the “greenest” electric power generator.
As far as Metroplex air quality, those three new plants are near Waco, just to the southeast. At least on some days, prevailing winds come here from the south-southeast, and the more electricity from that plant, the more problematic the air quality in or area, already under Environmental Protection Agency non-attainment citation.
Over a 24-year period, stepping up conservation efforts would likely save CAPP cities as much money as TXU's coal-black smokestacks will pump out, and with the benefit of saving electricity in general.
Well, electric power generator Luminant is presenting what claims to be the real deal, and Cedar Hill, Duncanville and Grand Prairie are among cities that have signed up.
But, the hidden costs of these and other cities getting a minimum of 60 percent of their electricity from coal-burning power plants - hidden costs that could include increased carbon dioxide and mercury emissions - say that maybe this is too good to be true, or at least is a gift horse that needs further examining.
First, the trader of that gift horse needs a closer look. Luminant is what were the electric power plants of the old TXU. That's before leveraged buyout artist Kohlberg Kravis Roberts, profiled in the movie “Barbarians at the Gate,” along with Texas Pacific Group and Goldman Sachs, acquired TXU about two years ago.
Now, TXU wasn't exactly in the charity business even before the leveraged buyout. KKR never has been charitable, as the movie I mentioned documents. And, anybody watching current Treasury Secretary and Goldman Sachs alumnus Henry Paulson in the past month or two knows that he (and his company) are not known for befriending the little guy or paying attention to Main Street instead of Wall Street.
The three cities above, and others, have joined Cities Aggregation Power Project. If enough cities join the deal, CAPP cuts Luminant a check for $465 million. In exchange, they get 60 percent of their electricity at a fixed rate, on a 24-year contract, starting at a cheap $7 a kilowatt-hour.
Luminant needs the money. It has leveraged buyout debt, and anybody who's watched Crazy Uncle Henry Paulson's roller coaster knows that, these days, an antsy debtor can get an itchy trigger finger to call in debt.
In addition, Luminant has three new coal plants coming on line, and debt from them to pay off too.
Luminant gets well more than half of its electric generation from natural-gas plants. But, it's offering cheap (not allowing for any loopholes) power to cities that don't have a problem getting the majority of their electricity from relatively dirty coal.
The rates are cheap enough that it looks almost like bribery-level offerings to get CAPP cities to help Luminant pay off its leveraged buyout debt before some creditor in today's credit-tight world starts calling in notes.
Also on the financial side, the leveraged buyout trio promised to keep rates low through Š wait for it Š the end of 2008. I'm sure Luminant is going to be beating the bushes hard for new city customers for the next four weeks.
If enough cities sign up to launch CAPP, who knows what the price will be down the road on the 40 percent of power that's sold at floating rates?
Beyond that, there's the issues of air quality and global warming.
First, global warming. Coal emits a lot more carbon dioxide, the most common human-generated greenhouse gas, than does natural gas. Many inside-Washington environmental analysts expect some sort of national carbon dioxide emissions cap-and-trade program to come out of the Obama Administration, and relatively soon.
How much that will affect coal-fired electric costs, and how much of that cost Luminant would try to shuffle over to the 40 percent of the electricity it will provide CAPP cities at floating rates, is unknown. But, the fact that this thumb could potentially come down on the price scale means the CAPP deal may not be quite so cheap as billed.
Meanwhile, Luminant's four dirtiest power plants are estimated to be responsible for 5 percent of all mercury pollution in the United States. Luminant says it's working to clean up its plants, but didn't we hear that from the old TXU years ago? Just as pre-buyout TXU wasn't a charity, it wasn't exactly the “greenest” electric power generator.
As far as Metroplex air quality, those three new plants are near Waco, just to the southeast. At least on some days, prevailing winds come here from the south-southeast, and the more electricity from that plant, the more problematic the air quality in or area, already under Environmental Protection Agency non-attainment citation.
Over a 24-year period, stepping up conservation efforts would likely save CAPP cities as much money as TXU's coal-black smokestacks will pump out, and with the benefit of saving electricity in general.
November 25, 2008
Is Luminant, née TXU, selling CAPP cities a bill of CO2 goods?
Coal-fired electricity could clash with green image of cities, and carbon cap-and-trade, and what other rats might be in the bin?
In exchange for locking in electric rates for 24 years with electrical provider Luminant (the generation part of the old TXU and now part of Energy Future Holdings after its buyout by KKR and – lest we forget – Goldman Sachs, ) via the Cities Aggregation Power Project, Cedar Hill (and other participating cities) are getting a minimum of 60 percent coal-fired electricity.
THAT is how the cities avoid the volatility of commercial electric rates priced on natural gas rates.
But, a number of Dallas-Fort Worth cities were members of the Clean Air Coalition. If any of them have signed on to CAPP, how does coal-fired electricity square with this?
And, if President Obama and the incoming Congress pass a carbon cap-and-trade system, coal-fired electric prices are surely going up. Is there an "out" in the contract for Luminant if that happens? Was the possibility even discussed?
It appears that, according to the city of Cedar Hill, and from what I've seen in the CAPP contract (though I haven't looked at it recently), there is no such provision.
All good news on the economic side for Cedar Hill and other cities. But, what if we go beyond cap-and-trade to a full-blown carbon tax? Luminant still appears on the hook... unless it deliberately tries to break the contract.
Luminant has said in the past it's OK with such a system, as long as it did not single out utilities. And, I am sure electric utility lobbyists would take care of that.
Also, Luminant touts its carbon dioxide offsets; if enough cities sign up for CAPP, will it have to build another wind farm to offset all the carbon from its coal-fired plants running nonstop, even if the coal-generated electricity, and its lower price, is only 60 percen t of the total electric delivery?
And, beyond that, neither the old TXU, nor KKR or Goldman Sachs, got rich by either being stupid or by being generous. If they're offering cities like Cedar Hill cheap electricity, there's a catch somewhere.
Getting 2/3 of the money up front does help pay off its LBO debt quickly, but it still seems risky to price even the coal-generated 60 percent of power that cheaply, and unless it gets a LOT of cities to sign up, just the up-front money can't do that much debt-clearing.
Oh, and in case you have forgotten, or did not know, here is a reminder of just how dirty the Luminant coal-fired plants are in terms of mercury emissions – four of their plants produce 5 percent of all mercury pollution in the country.
In exchange for locking in electric rates for 24 years with electrical provider Luminant (the generation part of the old TXU and now part of Energy Future Holdings after its buyout by KKR and – lest we forget – Goldman Sachs, ) via the Cities Aggregation Power Project, Cedar Hill (and other participating cities) are getting a minimum of 60 percent coal-fired electricity.
THAT is how the cities avoid the volatility of commercial electric rates priced on natural gas rates.
But, a number of Dallas-Fort Worth cities were members of the Clean Air Coalition. If any of them have signed on to CAPP, how does coal-fired electricity square with this?
And, if President Obama and the incoming Congress pass a carbon cap-and-trade system, coal-fired electric prices are surely going up. Is there an "out" in the contract for Luminant if that happens? Was the possibility even discussed?
It appears that, according to the city of Cedar Hill, and from what I've seen in the CAPP contract (though I haven't looked at it recently), there is no such provision.
All good news on the economic side for Cedar Hill and other cities. But, what if we go beyond cap-and-trade to a full-blown carbon tax? Luminant still appears on the hook... unless it deliberately tries to break the contract.
Luminant has said in the past it's OK with such a system, as long as it did not single out utilities. And, I am sure electric utility lobbyists would take care of that.
Also, Luminant touts its carbon dioxide offsets; if enough cities sign up for CAPP, will it have to build another wind farm to offset all the carbon from its coal-fired plants running nonstop, even if the coal-generated electricity, and its lower price, is only 60 percen t of the total electric delivery?
And, beyond that, neither the old TXU, nor KKR or Goldman Sachs, got rich by either being stupid or by being generous. If they're offering cities like Cedar Hill cheap electricity, there's a catch somewhere.
Getting 2/3 of the money up front does help pay off its LBO debt quickly, but it still seems risky to price even the coal-generated 60 percent of power that cheaply, and unless it gets a LOT of cities to sign up, just the up-front money can't do that much debt-clearing.
Oh, and in case you have forgotten, or did not know, here is a reminder of just how dirty the Luminant coal-fired plants are in terms of mercury emissions – four of their plants produce 5 percent of all mercury pollution in the country.
Subscribe to:
Posts (Atom)