THE ROUND TABLE: Extended coverage
By
Sean Ryan
Daily Reporter Staff
We
Energies is seeking Public Service Commission approval for a $4.2
billion, 1,830-megawatt baseload coal-burning Elm Road power plant
in Oak Creek to replace the one it currently operates there as
part of its Power the Future plan.
Because of the gravity of this issue for the region's economy
and the state's construction industry, The Daily Reporter on June
27 held a round table to allow representatives from Wisconsin
Energy Corp., Responsible Energy for Southeastern Wisconsin's
Tomorrow, Calpine and the Alliance for Power and Jobs to discuss
the issues face to face.
We Energies sent Kris McKinney, manager of environmental policy,
and Barry McNulty, Power the Future public affairs director; the
alliance sent Lyle Balistreri, president of the Milwaukee Building
and Construction Trades Council, and Jim Reynolds, president of
Racine-based Cast Tools Inc.; RESET sent S.C. Johnson and Son
Inc. spokeswoman Cynthia Georgeson and Dona Wininsky, public policy
director for the American Lung Association of Wisconsin; and Calpine
sent Director of Government and Public Affairs John Flumerfelt
and Bill McClenahan, government affairs consultant for Madison-based
Martin Schreiber and Associates Inc.
Following is a transcript of that dialogue:
OPENING STATEMENTS:
Balistreri:
My name is Lyle Balistreri. I'm the president of the Milwaukee
Building and Construction Trades Council. I'm also the State Building
Trades Conference chair. I support Power the Future plan as it's
being proposed to the Public Service Commission. This is a great
economic development plan for not only southeast Wisconsin but
all of Wisconsin. It means $860 million in wages and fringes for
construction workers, but it also means that other businesses
will be able to come to Wisconsin and address, be able to address
their energy needs with reliable, cost-effective energy over the
next 10 years. That's a real attraction. So business will grow,
and when business grows we continue to grow. We build more buildings
and that's a very important thing.
I believe that the plan, as it is laid out, using the diverse
fuels is a good plan because it is going to make sure that the
price of gas does not jump through the ceiling and people won't
be able to afford that. This is a wonderful plan. As you know,
the economic viability of southeast Wisconsin depends on something
like this.
Right now we're going through a very recessionary period. Well,
I don't know if you want to call it recessionary or not, but we're
experiencing a lot of unemployment in our industry. A lot of jobs
have been lost across the board in southeast Wisconsin. A lot
of manufacturers have left, and we want to be able to attract
manufacturers and industry to come back to Wisconsin and bring
their industry here.
Wininsky:
I wasn't aware that we were all not going to, so I am representing
purely the Lung Association viewpoint and I'm sure Cynthia will
have to fill in on some of the broader issues for RESET. But,
as I said, I am here representing the Lung Association, and most
people around the table I think are pretty well aware that next
year is Harley Davidson's 100th anniversary. But what I bet nobody
around this table is aware of the fact that it is also the American
Lung Association's 100th anniversary.
The American Lung Association of Wisconsin is the oldest voluntary
health agency in Wisconsin. And the reason I bring that point
up is the longevity is due to a variety of factors, including
the quality of the programs and services we deliver to people
all over Wisconsin. But in this case even more importantly it's
also due to our reputation for forming the positions we take on
issues based on solid scientific evidence. We study the issue.
We examine both the quantity and the quality of the evidence presented.
We consult with respected and partial experts, and we form our
positions accordingly.
The body of sound scientific evidence today, available today,
tells us equivocally that coal-fired power plants contribute,
are not the only cause, but contribute significantly to air pollution
that causes lung disease and that there are cleaner, safer alternatives
that do not have the same adverse health impacts.
We respect We Energies for the service they provide the community,
for the power that we all take for granted. In fact, some of their
top executives have been on our board of directors. It's because
of that relationship that we've met twice with them, with their
representatives, to hear their position and evidence, each time
with open minds willing to learn. We've heard a lot of very sincere-sounding
promises that Power the Future will not increase air pollution
and lung disease in southeastern Wisconsin, and in fact that air
quality will improve as a result of Power the Future. What we
have not heard, unfortunately, is the hard scientific evidence,
the kind I mentioned a little bit ago to back up those claims.
We've learned a lot about best-available control technologies
but nothing to document how these technologies will actually translate
into the kind of pollution reductions claimed.
Is that the end of my minute?
The Lung Association doesn't dispute that Wisconsin is facing
a growing demand for power and that new resources must be found.
Where we part company, however, is whether this plan, powered
by coal, located in southeastern Wisconsin, which is already designated
a federal severe ozone-nonattainment area, is the best plan for
the citizens of Wisconsin. We believe that alternatives exist
that are cleaner, safer, economically sound, and that those options
should be fully considered.
Flumerfelt:
I'm John Flumerfelt, director of government and public affairs
for Calpine. We are a national independent power producer with
approximately 100 projects across the United States, some presence
in Canada and the U.K. either in operation or under construction.
We're in the process of completing what is in fact the largest
power plant construction program in history, and our presence
in Wisconsin includes currently 900 megawatts of operating capacity
and a 650-megawatt project that's currently under construction
in Beloit. We just had a nice front-page story in the Beloit Daily
News. We've got Boldt Construction from Appleton, a local contractor,
helping us, 400 union folks on site. Pretty much at peak construction,
about 30 percent done. And our Wisconsin portfolio to date represents
about a $750 million investment. In addition, we have our Fond
du Lac proposal, and we recently bought the Fox Energy Center
from Mid-American Energy, and those projects are fully permitted
and ready to construct. Just yesterday in fact, we submitted,
or announced that we had submitted, an additional proposal to
the Public Service Commission to add some megawatts out of our
Fox project in addition to our Fond du Lac project as a potential
alternative to Oak Creek, or in addition to, whatever the commission
determines.
Our biggest interest in this debate is really the question - we'll
get into the coal versus gas issue I'm sure, that's certainly
a good debate to have - but really the issue of competition and
why there was no competitive procurement process involved in this
decision. Which is fairly unusual in today's market. And why it's
a good idea in general for a utility to build such a large and
high-profile, and what has now become a controversial, project
basically at the risk of its ratepayers instead of testing the
market and hedging some of that risk by going to private producers.
And that's really the issue that we've tried to bring to the table
here.
McNulty:
Well first of all, I want to thank you very much for having this
dialogue for us, for all parties. As you had mentioned as well,
and Calpine, we've all had various relationships with each of
the folks around the table in different sorts of ways. And most
importantly, I want to thank you for the very important dialogue
that we have to have here.
We Energies feels, quite frankly, that this is part of the philosophy
that we've used and approached this project -- and that's trying
to be as up-front, transparent and forward in talking about our
philosophy in terms of building this new, and very needed, generation.
It truly mirrors our whole philosophy about how we've approached
this project.
I appreciate the fact that also our agenda today recognized the
very critical and important need of the environmental concerns
and issues that are addressed and raised in this particular process.
They're also two very important issues that we need to address
and include in that discussion, and hopefully we can do that as
well. And that is part of the pillars of why we developed Power
the Future and that is the enormous economic impact that in fact
this particular project will have for the state of Wisconsin.
And No. 2, the goal of fulfilling our responsibility and obligation
of addressing affordable electric energy to everyone who needs
it and when they need it. It is very important, a responsibility
that we are very proud of. And we think we can do, and continue
to do, hopefully for another 100-plus years as well.
Today's discussion is certainly about the entire project. Our
ultimate goal, certainly, is that electricity for everyone that
is needed at prices that they can afford. So we really appreciate
the chance to actually have this kind of dialogue. Thank you.
Reynolds:
Can I speak for APJ, or is that included in what you, how you've
broken it up here? I don't understand.
My name is Jim Reynolds and I, as a foundry owner and participant,
represent APJ, which is the Alliance for Power and Jobs. Traditionally,
Wisconsin has been known as a foundry state. This has been one
of our basic industries since they first discovered sand up state
in the area, and that is what drew all the foundries to this area
-- simply a matter of transportation savings.
I recent years, I would say in the last five or six years, we've
lost something in the neighborhood of 17 or 18 foundries, and
without getting into any predictions, I can tell you that there
are four or five more that are on the block and will be gone in
the next five or six years. One of the reasons for this problem
is they have experienced traditionally, as compared to other states,
energy costs. Other states are either absorbing these foundries
or they are going out of state completely. It's our concern that
if we're going to progress and continue to produce in this state,
it's a little bit like can you drive a car without castings? No
you can't, it's a basic industry that almost every product uses
iron, steel or aluminum castings. It's a very, very important
industry. We're concerned with our job loss. We've lost in the
neighborhood of 3,000 jobs in the last five or six years in the
foundry business. These are good-paying jobs. You'd say, 'Well,
why don't you reconstruct those foundries or solve the energy
problem and bring them back?'
Those foundries are gone. Those jobs are gone forever. Those plants
will never be rebuilt. They will never be refurbished. They're
rusting away to destruction now. So it's something that we're
concerned with primarily for the basic industry and the job situation
in the state of Wisconsin.
QUESTION
1: WHICH DO YOU PREFER, COAL OR GAS?
Reynolds:
We prefer in the foundry industry because we're basically electric
melters, the continuation of coal. Coal, from an economic standpoint,
is to the advantage of what we consider to be large consumers.
I know that a lot of people have suggested, 'Well, Jim, there
is such a thing as renewable energy.' Well have you ever tried
to melt steel at 3,000 degrees Fahrenheit with prairie grass?
It just won't work. So we have to have reliable power sources.
We cannot be interrupted.
We're already having grayouts, or brownouts as you might want
to call them in the western part of the state, because when all
the air conditioning units in Minneapolis are running, we can't
get electricity to run our foundries. So there's got to be, No.
1, dependable energy. You can't interrupt our melting cycles.
Secondly, it's got to be furnished at a reasonable cost. We cannot
begin to pay premium prices for our power as compared to other
states. Now that's going to happen if we don't go to coal because
of the simple fact that there's a limited availability of gas.
The environmentalists won't let us drill for more. There's no
substantial amount of gas in storage that will be able to get
us through this summer and next winter. And it's a very, very
critical situation from an availability and cost standpoint.
My suggestion is that if you go to gas, you better find a forester
because you're going to need somebody who can supply you with
firewood all winter.
Balistreri:
My preference is for a diverse fuel use. That's what we need to
do in terms of making sure that the cost of energy is as low as
it can be for the consumers of the state of Wisconsin. Quite frankly,
I've heard all of this talk about alternatives out there and that
sort of thing, but I haven't heard about the alternatives. Nobody's
really presented an alternative. And I have to tell you there's
not enough gas capacity coming into the state of Wisconsin to
accommodate all the merchant plants that are out there and accommodate
a large baseload utility plant in Oak Creek, Wisconsin. It just
won't work. There's just not enough there.
And every day you read in the paper about gas prices going up
and up and up. What do you think is going to happen if all of
the gas, and it's my belief that if they were to put gas-fired
turbines at Oak Creek, there really wouldn't be enough gas to
go around to supply the customers in the state of Wisconsin. We've
only got a few pipelines coming into the state of Wisconsin. Guardian
has been under construction forever. And it's not an alternative.
What we have, what's been planned here, and what's supported by
APJ is something that will work for the state of Wisconsin in
terms of generating affordable and reliable energy for the future.
And there is no other plan.
Georgeson:
We live in a severe nonattainment area here in southeastern Wisconsin,
so the location of this coal plant is of vital importance. I don't
think there's any argument that we need reliability. We need affordability.
And, according to the PSC's draft environmental impact statement,
we can have both and we can have it without this plan. That's
what their alternative has shown, and Calpine themselves have
also offered up an alternative.
I want to address the issue of capacity versus generation and
diversity of the fuel mix. And, I'm handing this out so you all
have this, these are taken from, I think, Barry, you'd agree,
these are taken from your own numbers here. What you see on the
left is the capacity, what could be created, on the basis of the
diversity of the current generating mix. But what you have on
the right side is the actual generation. And you see that only
3 percent is natural gas. The rest makes us wholly dependent on
coal.
We're
making a decision here that can't just be made on today's needs
but also has to look at the future needs and from an environmental
and a health perspective, as well as from an economic perspective.
When you look at the first 10 years of the Clean Air Act regulation,
severe nonattainment areas lost 590,000 jobs. That's 590,000 jobs.
They lost in excess if $30 billion in lost revenue and in of $70
billion in lost manufacturing investment and taxation. These are
significant numbers. The case is clear that in severe nonattainment
areas, where we are here in southeastern Wisconsin, everyone --
that means people, the public, it means companies, it means our
public utilities - need to be doing everything they can to help
us achieve attainment status.
Wininsky:
Could I just add, in addition to Cynthia's comments as well? When
you look at the economic impact, we tend to look at these very,
very lofty and high how many jobs will it create and how many
tax dollars in revenues. But you also have to go down to a much
lower level that the common man, I think, can relate to as well.
When you're talking about an ozone action day, like we had the
other day, what is the economic impact on a family who can't afford
air conditioning and has three children with asthma? What is the
economic impact on that family that does not have insurance or
is underinsured and doesn't have primary care and has to use very
costly emergency department service for their very basic medical
needs - for their asthma attacks on these high ozone days? What
is the economic impact of the parent who has to give up a half
a day to a full day's wages because he or she has to take that
child to the emergency department or stay home for a day with
a sick kid.
And businesses too. There's an economic impact on business. What's
the higher insurance premiums for the increase in the lung disease
that's going to, that will accompany the air pollution? What's
the cost of the lost productivity of having increased sick days,
of having X percent of your workers out for the day instead of
being on the job? You know we argue jobs, and I'm picking numbers
out of the thin air, whether a coal plant will generate 1,200
jobs versus a gas plant that will generate 1,000 jobs. When we
don't factor in the things like the deteriorating air quality,
the increased sick days, the lost productivity, we argue the raw
fuel costs. What is the cost of natural gas versus the cost of
coal? When we don't look at the things like the excess medical
expenses and the human costs that these families are bearing every
day with their children with asthma. I just would like to see
those kinds of economic costs factored in as well.
Balistreri:
Excuse me, if I may. Are we still on the first question? We're
jumping around a little bit.
Georgeson:
He asked why we were for.
Wininsky:
About what's cost effective. I was trying to address the question
of what's cost effective.
Flumerfelt:
Calpine is exclusively in the business of using either renewable
geothermal energy to generate electricity, or natural gas. We've
basically made about a $15 billion business decision to invest
in natural gas-fired power plants across the country. We also
have a natural gas company doing business as Calpine Natural Gas
that owns gas reserves in the U.S. and Canada with the goal of
supplying about a quarter of our own gas needs from our own reserves
as part of our long-term risk management strategy.
The reason that the founders of this company have basically chosen
this as a fundamental part of our business plan, and the reason
that we've avoided, unlike some of our other colleagues in the
independent power industry, going out and buying old coal and
nuclear utility assets, is we believe that there are just overwhelming
environmental and cost reasons why natural gas made sense two
years ago and still makes sense today even at high prices, which
we don't think are going to last forever, in terms of a long-term
benefit.
When you look at the cost analysis, as they did in the draft EIS,
and the reason I think our Fond du Lac project compared very favorably
to the Oak Creek proposal at Elm Road is that the huge capital
costs associated with coal and the long construction time which
you accrue interest during cosntruction, tend to offset the fact
that on a Btu basis, coal is a less expensive fuel in terms of
short run marginal operating costs. The ultimate cost to ratepayers
in Wisconsin is going to be a combination of capital costs and
operating costs, and the capital costs for a gas plant are probably
two to three times less than a coal plant even though we have
higher short run operating costs. Basically it takes about 30
years for amortization for a new coal plant to make sense.
We tend to think that over the next 30 years, a lot is going to
change. In fact, the current president, even if he gets re-elected,
is not going to be in the White House by the time the first of
these units goes online or maybe even begins construction, depending
on how things work out. We happen to think that coal deserves
a place on our energy mix. We are not of the opinion that gas
is the best and only fuel and will continue to be the best fuel
infinitely. We look at it, as many environmentalists do, as a
transition fuel until we come up with something that makes sense
for the next generation technology.
We happen to be strongly supportive of the IGCC - the integrated
gas combined cycle -- technology that was proposed at the third
part of the Elm Road proposal. We tend to think that any and all
new investments in coal technology should really be focused in
that direction at this point because that's really the only way
that we see over a 30-year time horizon that coal is not going
to run into some fairly significant risk in terms of environmental
and cost impacts on customers because you can just do a lot more
environmentally with IGCC. It's not quite a commercially available
technology, but we would argue that pulverized coal technology
is basically, you could argue it's already obsolete, or that certainly
it's going to become obsolete over the life span of this project.
We have asked the PSC in our draft EIS comments to take a look
at an EGEAS model run looking at just a 15-year cycle, because
we have said that we'd be willing to enter into a contract for
as little as 10 or 15 years, which we think helps consumers by
hedging their risk, and we think gas makes sense because the capital
costs are lower and that coal just doesn't make sense.
And as we have seen with the EPA settlement and other issues,
unfortunately, no matter what your politics are, reinterpretations
of existing law or new environmental laws can translate very quickly
and very dramatically into additional costs that ultimately are
likely to be flowed through to consumers. So it's not just an
environmental issue, which is important in and of itself, but
it's a very legitimate cost issue, which you guys should be concerned
about in the industry.
McNulty:
Thank you. Why do we prefer coal and gas as part of our mix? Power
the Future is about adding new coal technology, adding natural
gas as part of our plan, as well as additional renewables as well
as conservation measures. Part of my point about making sure that
we keep it in the full context.
Specifically why we add coal is because the state of Wisconsin
Public Service Commission has done an extremely good job over
the many years regulating utilities and determining what is most
cost effective while protecting the citizens as well from a health
standard. In terms of making sure that utilities are meeting the
health and air standards that people require, desire and need.
One of the things that we need to pass along to you is our reasoning
of why coal makes sense. Because of the coal long-term strength.
Coal has obviously a much longer reserve than natural gas in terms
of the fact of what we're dealing with. And that's something that
should be considered when it comes to the economics of what's
at stake for Wisconsin's economy and it's ability, actually, to
be able to afford electricity, as well as natural gas.
Our
company actually has a little experience when it comes to natural
gas. We're the 10th largest distributor in the nation. So we know
a little bit about natural gas. Natural gas reserves continue
to decline. The proven reserves have not been keeping pace with
the demand, and that's our big concern when it comes to natural
gas. I have a chart that reflects that as well.
The
other chart, which is the third chart that I'd like to pass round,
is a chart that's based upon the Public Service Commission Commissioner
Bert Garvin gave a presentation to the state Legislature not too
long ago, talking about over the past recent years, let alone
nationally, but also in Wisconsin, it mirrors what is occurring
in Wisconsin, and that is all of the new generation proposed and
built in Wisconsin have been extremely heavy on natural gas. And
as a result of that we are putting our consumers at great risk
as well in terms of the price volatility that is a huge concern
for natural gas.
Coal
is plentiful. The price of coal is very stable. Combined with
the technologies that what you can do with coal reflect that in
fact, coal is an option that definitely should be considered.
And that is, of course, why we're having this debate. Supply and
price volatility are certainly something that need to be considered.
I got the wrap up signal, so. I keep looking up--
Flumerfelt:
You're just so polite.
McNulty:
Yep and I'm trying to cut it off as soon as I can. Who's next?
Flumerfelt:
Do you want to give 30 seconds for rebuttal? Your rules, whatever
your rules are.
We don't disagree that there have been a lot of new natural gas
plants built both in Wisconsin and across the country. But I would
just make the point that there is a really good reason for that.
They are the choice of the market, both environmentally and economically,
and that's why they're there. It's not an anomalous market behavior.
It's a perfectly rational market behavior.
The other point I'd like to make is I've seen this chart from
Wisconsin Energies a couple times that shows we only have nine
years of gas left, and if that's the case, I guess I kind of wonder
why you broke ground on Port Washington yesterday and I'm assuming
you're still marketing natural gas at the residential level for
heating and hot water. It would seem to me that if the sky-is-falling
sort of perspective on the gas market is true, which we certainly
don't agree with, that we should probably be taking extraordinary
action now to switch people away from that because we're about
to run out of it like we were in '72.
McKinney:
You know that's not what that chart means.
Georgeson:
I'll have 30 seconds of rebuttal too. Two things. I agree with
what John was saying. What we're talking about are untapped reserves.
I don't think there's any argument around this table that there
is enough natural gas in the ground. It's a question of whether
or not we're going to invest in bringing it here.
As to the cost issue of coal versus gas - we asked MSB Associates
a couple of months ago to take a look at that. Here are two charts
that I'm passing around, one with the comparative costs of natural
gas versus coal. And what you see here across the board is due
to the increased, three times more, capital cost involved in building
these coal plants versus natural gas, you see that natural gas
is always less expensive. We've also done these runs at five other
different price points for natural gas, going as high as $7 per
million Btu, and in each instance the capital cost far outweigh.
These costs are costs that are going to be passed on to ratepayers.
McKinney:
I'm glad you brought this up because we have taken a look at the
analysis that was done to develop these charts, and not only are
the environmental costs double-counted in this chart, but by the
time that you get to the box on the far right they are absolutely
triple-counted.
Georgeson:
Absolutely not
McKinney:
Absolutely positively, and I look forward to the technical hearings
in Madison with the commission if you bring this up, because everything
that's in the green box is already real costs which have been
factored into the costs to build the new units. The same with
box No. 4, mercury emissions. State-of-the-art mercury controls.
The best in the country, the best in the world. Absolutely positively
for the new units. We will meet maximum achievable control technology
for mercury on the new units. We will apply selective catalytic
reduction for NOx control on the new units. We will apply flue
gas desulfurization for SO2 control on the new units. We will
put wet electrostatic precipitators on the new units to control
other emissions.
Those costs, everything in boxes three and four, are already factored
into the real costs of this project. Externalities for the most
part have been almost entirely incorporated into the cost of producing
this electricity because of the regulations we have faced and
are facing now.
The premature death estimates in box No. 5 is about as much hocus
pocus science, not ever published in the peer-reviewed literature.
The linkage between concentrations in the atmosphere and health
effects. The statement in here about SO2 emissions being linked
to premature deaths: The EPA has never said that. Only the Clean
Air Task Force and those folks have said it.
McNulty:
Let me just add one thing. I agree with Calpine, in fact I think
we might even be their largest customer in the state of Wisconsin
in terms of purchase as well as out of Zion, Ill. But we have
a partnership, and we purchase a tremendous amount of gas from
Calpine.
Flumerfelt:
And we love you for it, thank you.
McNulty:
Thank you and we love that. That's the part that's not showing
on the chart that Cynthia often forgets to include is the fact
that our state imports a tremendous amount of electricity. We're
at our limit in importing that power. We import probably about
15 percent of our power, which happens to be all natural gas,
by the way.
Does anyone want this?
Balistreri:
Well, as far as the nonattainment, the discussion about nonattainment
areas. You know there are so many things that contribute to nonattainment
areas.
I'll go back to my original statement over gas as an alternative.
First of all, I don't see any of the proposals out there. You
know? Over the generation for southeast Wisconsin. All of a sudden,
everybody comes to the room and I hear now that there's a proposal.
I'd like to see whatever proposal is out there. And I think that
if you go to the facts, the facts, as they are presented to the
Public Service Commission, you will find that a lot of the things
that are being said about natural gas and the use of natural gas
as an alternative just can't work for southeast Wisconsin.
And in terms of those people who are asthmatic and those sorts
of things, and would suffer. I have to tell you, pneumonia is
also a very dangerous disease, and when people can't heat their
homes because the cost of gas has gone through the ceiling, it's
only going to exasperate things like lung diseases.
Reynolds:
Can I make one small point? Do you know who Alan Greenspan is,
young lady?
Georgeson:
Are you talking to me?
Reynolds:
Yes, I've forgotten your name. I'm sorry.
Georgeson:
Thank you for calling me young. I appreciate that. But my name
is Cynthia.
Reynolds:
Okay Cynthia young. Do you know who Alan Greenspan is?
Georgeson:
Yes I do.
Reynolds:
He is very, very upset because he sees into the future a little
bit, and he's anticipating a very big problem with the cost of
gas.
Georgeson:
Thank you for telling me that.
Reynolds:
Okay, well I just thought you'd like to know because he's been
all over the Wall Street Journal in the last two or three days.
QUESTION
2: TO WE ENERGIES AND ALLIANCE: EXPLAIN HOW BURINING COAL IN A
NONATTAINMENT AREA IS GOOD FOR THE REGION'S ECONOMY. TO RESET
AND CALPINE: SOME OF RESET'S CORPORATE MEMBERS WOULD BE CONSTRAINED
IF WE ENERGIES EXPANDS ITS COAL PLANT IN THE NONATTAINMENT AREA.
HOW MUCH OF THE OPPOSITION TO WE ENERGIES' PLAN IS BASED ON THOSE
MEMBERS' INTERESTS?
McKinney:
I'll first start by saying your assumption in the second bullet
about corporate members being constrained by the expansion of
coal presumes that that's the correct answer. Which of course
it's not. The other thing to keep in mind is when we're comparing
new coal to new gas, we're talking about low emissions in both
cases for the precursors of ozone compared to other contributors
to the issue. Not only in southeastern Wisconsin, but in northeastern
Illinois and northwestern Indiana, which are also part of the
one-hour severe nonattainment area that's been in place since
the Clean Air Act was first passed back in the 1970s, and will
also be nonattainment for the new eight-hour ozone standard that's
coming into being.
The Power the Future plan was designed with those issues in mind
and as being part of the solution to those problems. Those are
regional problems. Our fleet of power plants are also being proposed
to be controlled as part of this proposal. We will be reducing
our precursor ozone emissions by over 65 percent by implementing
this plan. By reducing emissions at our existing power plants
and by building new units that are very clean.
I've seen some of the RESET presentations that talk about NOx
emissions being greater from new coal than from new gas, and that's
true. But again, putting that in context with the existing emissions
from our power plants, from other sources that contribute to ozone
formation, we're going to be dramatically reducing those emissions
as part of this proposal. Emissions from the new units are only
a small contributor to the overall emissions.
McNulty:
I'll add and I'll just pass it on because I'm sure that time is
running out. It's very important not to mischaracterize a quote
that was used before about lofty jobs and lofty numbers. The numbers
were computed by a firm that also did the numbers by RESET's own
PR firm for Miller Park.
The fact is that what we can do in Wisconsin is coexist. We want
to reduce emissions and we think that's the right thing to do.
Our Pleasant Prairie power plant, the largest coal-fired power
plant in the state of Wisconsin, has attracted over 7,400 new
jobs to that community. And they are manufacturing and commercial
jobs in and within the severe nonattainment ozone area. It can
coexist. We're trying to make it better. This plan is the right
step forward to do just that.
McKinney:
Two sentences on the issue of credits. I get calls every month.
People from our company get calls every month from people that
want to sell us volatile organic compound credits. Which are what
we had to do not only for the gas plant that we are building in
Port Washington but also for the coal plant. So credits are out
there. We can get those credits also from Illinois and Indiana.
We're not constrained to the area around the site where the plants
are being built.
Balistreri:
So, let me get this right. Then, we're proposing to reduce emissions
in southeast Wisconsin. We're proposing to provide more energy
needs for consumers in southeast Wisconsin at an affordable, reliable
price. And so, then you have a nonattainment area where you have
all sorts of contributing factors: you have motor vehicle emissions,
you have the stuff coming in from northern Illinois, which by
the way they think the plan, the PTF plan in northern Illinois
is a plan that they should be adopting down there because they
have old, dirty coal-burning technology. And all of these things
contribute to nonattainment areas, so I think it's wrong to hang
the whole nonattainment issue on coal emissions in southeast Wisconsin
because there are so many other contributing factors.
And having said that, once again that people, that We Energies'
plan reduces emissions over the next 10 years. I don't see anything
else. What is the alternative here? Do we go with natural gas,
which isn't going to work because there's just not enough capacity
out there? That is not an alternative. Or do we burn what the
existing coal plants and the old dirty coal technology? What We
Energies is trying to do here is make the environment better.
Georgeson:
Mr. Reynolds, did you have something that you wanted to add?
Reynolds:
I'm not really sure where we are on the chart, but I'd like to
make one point. Last year, the state of Wisconsin got curious
about what they could do with clean coal and what they could do
with emission problems. So they got a consortium together of 23
people, which cost, I'm sure, a hell of a lot of money, and they
sent them to Berlin, Essen Leipzig, Dresden and Munich. They were
all over there for a quite a long time. The people who were represented
on that, in some of that group, were from the DNR, the Public
Service Commission, Alliant Energy, Madison Gas and Electric,
Wisconsin Gas, Wisconsin Environmental Initiative, a representative
from UW-Madison, the Environmental Decade, and I believe the Sierra
Club was involved. I'm not quite sure about that.
But, in any event, to make it short and sweet, they came back
from Germany and they were all asked what their opinion was of
the 100 percent coal energy used in Germany, and they all agreed
that based on what the Germans were doing, this was the viable
way to go.
Now, the question is this: Why are the Germans so much smarter
than we are? What are we not doing that they've done? When you
look at the geography of the country of Germany, these many power
plants are stuffed into a lot less acreage than we have in the
state of Wisconsin. Yet it's very heavily industrialized area.
But they don't burn any gas. They burn coal and they do a good
job of it. And to rub salt in the wound, they took the picture
of a lady out in her yard hanging up the laundry, and would you
believe there's the stack in her back yard, or just in the background.
Out of which there was an emission, and it didn't seem to bother
her. Why? I can't answer that.
Georgeson:
I can't answer that question because I wasn't on that trip. But
I'm sure that if I had a trip to Europe, I would've felt good
and energized.
Reynolds:
I'm sorry, what was your last sentence?
Georgeson:
I said that I'm sure that if I had a trip to Europe I would've
felt good and energized about what I've seen. I certainly wouldn't
want to go and live in Germany, because I have been there, and
I've seen the pollution, and maybe she felt that way because she
didn't have anybody thinking about her health, and thinking about
her environment.
Reynolds:
I'm sure she was thinking about it.
Georgeson:
RESET's corporate members would be constrained if We Energies
expands its coal plant in the nonattainment area. Our opposition
is based in part on that. But not the lion's share of it. A severe
nonattainment area requires everyone in that nonattainment area
to do their part, and as much as their part can be.
We do our part when we go and we pay for living in a nonattainment
area when we fill up on gas. The question is just how much more
can we pay out of our pocketbooks for that. Expansion from a manufacturing
standpoint is going to be, continue to be, difficult and will
be more difficult as the eight-hour rule goes into effect. That's
not just me saying that. That's the PSC saying it. That is also
other businesses saying that as well.
We're
looking at a plan that you describe as being designed with all
of this in mind. I can't imagine how it is designed in CO2 monetization,
which your own organization has declared is not an 'if' scenario
but a 'when' scenario. And that you have already deemed through
your involvement in the series group as being something that is
a dire, financial and environmental risk to your shareholders
and to the public's interest. So how in the world, I wonder, can
you then want to create in this area one of the largest emitters
of CO2? That's what it would become, if you build the seventh-largest
coal plant in the country, in this densely a populated area, in
what is already severe nonattainment. As businesses, we have to
think about how we will attract people to live here. It's already
difficult, and it's going to be more difficult.
Wininsky:
I just wanted to add a couple of comments. I acknowledge that
power plants are not the only source of the pollutants that contribute
to ozone, but they are a good third, they do contribute a good
third, electrical utilities contribute a good third of the NOx
emissions, which is a primary component of ozone.
Whether or not We Energies is actually able to reduce emissions,
I think we also need to broaden the discussion as to where the
pollution is coming from beyond just the stacks. We're talking
about the pollution that comes from the coal, increased coal piles.
The pollution that comes from train traffic, the diesel burning.
Those are all sources of pollution as well that will increase
as part of this plan.
And one of the things that I wanted to pass around was just right
now what the current stats are in terms of the number of at risk
groups there are in southeast Wisconsin county by county who could
potentially be negatively affected by increases in pollution.
And I'd like to know at some point in time how these numbers are
going to change with the reductions that We Energies is proposing.
That's the only comment I have to make here.
