Archive for July 2016

New York’s Nuclear Power Plants May Suck up Billions in Ratepayer Subsidies

Posted by NYPIRG on July 25, 2016 at 8:30 am
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When public officials reach for over-the-top metaphors, more often than not it’s an effort to distract the public from the question at hand.  Such was the case when Governor Cuomo argued that the state should spend billions of ratepayer dollars to shore up New York’s aging nuclear power plants.

Last week, the governor defended his plan when a reporter asked if nuclear had a role in the state’s energy portfolio.  The governor responded that there were protesters for virtually all of the state’s energy sources, including gas, coal and nuclear. He said, when combined with renewables, nuclear was an important energy source going forward.

“Unless we’re willing to go back to candles, which would be uncomfortable and inconvenient, we need energy generation,” Cuomo said.

Of course, the issue is not whether the state should subsidize nuclear power or return to candle power.  The question is should the state spend big bucks to prop up a 20th century power source that has a host of significant problems?

The Cuomo Administration is arguing to preserve the plants because they’re an emissions-free power source.  The plan to preserve the facilities is being included in the state’s Clean Energy Standard plan, which mandates that New York receive about half its power from renewables, such as solar and wind power, by 2030.

The agency handling the decision is the Public Service Commission.  The PSC is considering a plan that offers nearly $1 billion in ratepayer-financed subsidies over each of the next two years to save nuke plants battered by rising costs and competition from cheap natural gas.

That subsidy is likely to grow to the multibillion-dollar range over the 12-year period proposed by the state.  Approval of the subsidies would make New York one of the first states to reward nuclear plants.

The PSC outlined the plan in January, saying that the subsidy could cost anywhere from $59 million to $658 million by 2023.  But recently the Administration disclosed that the actual amount would be closer to $1 billion over the first two years.  And that costs would climb steeply thereafter.  The plan could cost $8 billion over the next 12 years, with all of the cost passed on to New York’s ratepayers by adding the subsidies to monthly utility bills.

From the state’s perspective, the subsidies are a way of putting a dollar value on the benefits of a reliable carbon-free power source.  The Administration also argues that the estimates of costs to ratepayers’ utility bills do not consider possible rising energy costs as well as the cost of providing energy if the plants were shut down due to lack of public financial support.

Propping them up for now, supporters say, will give the state time to foster a stable mix of renewable energy sources.  The plants accounted for about a third of the power New York generated last year, as well as more than half of its emissions-free energy.

Those rosy estimates ignore other costs – there is plenty of fossil fuel burned to mine and transport the uranium used in the energy production process and, of course, there are the issues of disposal of the radioactive wastes and the dangers associated with these power plants generally.

Right now and for the foreseeable future, the plants themselves are the storage sites for radioactive wastes, which must be kept secure for thousands of years.  As seen in the recent Japanese disaster, these types of power plants can cause devastating damage if an accident occurs.

In addition to possible public health concerns, it was that staggering sum in the growth of the ratepayer subsidy—revised upward close to the end of the comment period– that caused watchdog groups to question whether the state is about to approve a major industry bailout with minimal public scrutiny — even though it is the public’s utility bills that will grow.

The Administration has set an aggressive schedule for consideration of its plan with only a two-week public comment period.  The PSC is expected to act at its August 1 meeting.

That’s an extremely tight timetable.  Too often, the Cuomo Administration has advanced costly plans without adequate public review.  The multi-billion dollar new Tappan Zee Bridge still does not have a financial plan that would let the public know of future increases in roadway tolls, for example.

It is the public’s money.  If they are informed, and agree to accept the costs and risks, then the plan is worth debating.  But it is wrong to move ahead without a robust public debate.

New York Makes a Big “Green” Move

Posted by NYPIRG on July 18, 2016 at 10:32 am
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Following the hottest year in recorded history, and the warmest winter, New York State is enduring a scorcher of a summer.  In fact, the state Department of Environmental Conservation has declared that all of New York is now on a “drought watch.”

And while we cannot attribute all of these changes in weather to global warming, it certainly doesn’t help.  The world’s experts have long agreed that global warming is, in large part, the result of human activities.  They have documented that the planet is heating up and that climate changes will result – a hotter planet will result in droughts and more intense storms, for example.

Those experts have concluded that in order to curtail the damage that global warming is having on the planet, policies should be put in place to reduce the amount of greenhouse gases the world releases into the atmosphere.  Since much of the leading greenhouse gases are the result of the burning of fossil fuels – coal, oil and gas – these experts have argued that public policies focus on keeping those fuels in the ground.

In New York State, the governor heeded that advice when he announced that the state would not allow the oil and gas industry to use hydraulic fracturing (fracking) to exploit New York’s natural gas reserves.  At that time, New York State was the first state with significant natural gas reserves to ban fracking.  Since then, there has been a growing body of evidence that fracking does pose environmental and public health risks.  And what has become clearer still is that the world needs to keep fossil fuels in the ground – not burn them so the resulting gases rise into the lower atmosphere and become a heat-trapping blanket.

But that decision raises an important question – how does New York generate power in a post-fossil fuel era?

Last week, New Yorkers got a glimpse of how that question will be answered when the Cuomo Administration announced the construction of a large wind farm off the coast of Long Island.

The Administration declared that it would power the state with 50 percent renewable energy — more than twice what it uses now—by 2030.   An important way to reach that goal would be to use the wind power generated off the Atlantic coast.

According to the Administration, the wind farm would be the largest in the nation.  When completed in 2022, it would consist of 15 wind-powered turbines located 30 miles off the coast of Montauk, at the eastern end of Long Island. The project would generate 90 megawatts, enough energy to power about 50,000 Long Island homes.

The benefits of a wind farm off Long Island include power generation close to a densely-populated area with high electricity costs, and proximity to large ports.  The project also would provide a good source of jobs.

Of course, generating power from wind also helps to reduce the state’s reliance of fossil-fuel-based power generation sources, and helps curb the health-related harms resulting from pollution generated by these sources.

Wind power alone is not the solution to meet the world’s energy needs.  Other alternative energy sources – most notably solar – will also need to develop.  And we’ll need to take a big step forward in battery storage, to allow us to bank energy when the sun isn’t shining and the wind isn’t blowing.  Nevertheless, offshore wind power is adding significant power to the world.

Globally, generation more than quadrupled between 2000 and 2006. At the end of last year, global capacity was more than 70,000 megawatts. In the energy-hungry United States, a single megawatt is enough electricity to power about 250 homes. Germany has the most installed wind energy capacity, followed by Spain, the United States, India, and Denmark. Development is also fast growing in France and China.  Industry experts predict that if this pace of growth continues, by 2050 wind power will be the answer to one third of the world’s electricity needs.

New York State has taken a big first step to helping the world meet that demand.

Higher Education Takes Center Stage in the Presidential Campaign

Posted by NYPIRG on July 11, 2016 at 7:27 am
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Campaigns matter.  When candidates commit to a policy objective, there is a good chance, although no guarantee, that it will be taken up.

At the Presidential campaign, one important issue has emerged on the Democratic side: the policy response to the growing debt burden resulting from skyrocketing college costs.  According to recent estimates, college graduates now carry a debt burden well over $1 trillion, making it the second highest level of household debt after home mortgages.

These debts are the direct result of government policies to shift the burden of a public college education from society to the families of college students.  New York State has not been immune to this trend, over the past 20 years there has been a dramatic shift in the burden of paying for a college education.  In recent years, that trend has accelerated due to the policy of annual increases in public college tuition.  In 2008, before the annual tuition hikes went into effect, students covered 50 percent of SUNY’s budget; they now cover over 60 percent – thanks to the tuition hikes and the stagnant state support.

On the Democratic side of the Presidential debate there have been proposals to stem that shift.  Last week, Hillary Clinton, the presumptive nominee, advanced a plan to have the government pick up the tab for a public college education.  While the Republican presumptive nominee, Donald Trump, has yet to advance a plan, it was reported that he will do so later this month.

Under Mrs. Clinton’s education proposal, the federal government would provide tuition grants to states that agree to put up some matching money.  The Clinton plan would begin by covering students from families earning $85,000 a year or less. The yearly income cap would rise by $10,000 a year, reaching the $125,000 ceiling in 2021, when it would cover about 80 percent of American families with college-age children.

A big chunk of the cost of the program would be borne by individual states, which would be required to match federal effort, if those states wanted to offer tuition-free public colleges.

The Clinton plan would be paid for by limiting tax deductions for high-income taxpayers and by closing tax loopholes, particularly those used by hedge funds and private equity firms. A similar plan offered by US Senator Sanders had said his plan to make college tuition free would have cost $70 billion a year, with one-third of that paid for by states.

The requirement that states must offer a funding match, much like the health insurance plan for the poor (Medicaid), is one weakness of the Clinton plan.  As recently seen in the health insurance expansion resulting from the Affordable Care Act, some states may choose to opt out.  If they did so under the Clinton higher education plan, it is not clear what would happen.

In addition to possible opposition from states that would not want to pay or that resent federal intrusion, the plan might face resistance from private colleges and universities that compete with public institutions receiving the federal money, even though it pledges $25 billion over 10 years to help historically black colleges and other private colleges with modest endowments.

While it’s hard to imagine New York State opting out of the Clinton plan if it were to become law, the opposition by private colleges and the ideological opposition of some states could ultimately sink the proposal.

Unlike the expansion of health insurance, which offered more health benefits to the poor, the Clinton plan would be very appealing to states.  Even the opposition would have to concede that the vast majority of Americans of college age – not just the poor – would benefit.  And the future economic health of the nation, and the individual states, hinges on the skills of its youngest adults.  A free public college education would draw younger families like a magnet.

Of course, the plan does hinge on Congressional support.  But the debate has begun over who should bear the cost of the educational investment in younger adults – society or the individual?

It is a debate well worth having.