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Post by jeffolie on Jun 8, 2013 13:53:51 GMT -6
Dead nuke speaks for itself, ratepayer folk out $Billions Crony capitalism in California helps SCE shareholders collect dividends on a deak nuke power plant " .... So the shareholders continue to collect $1.35 per share in annual dividends while a plant accounting for 20% of the company's electricity generation sits idle. And ratepayers continue to pay tens of millions of dollars a year for the same nonfunctioning shell. my jeffolie view: one of the reasons my sweet wife Olie and I escaped SCE by installing a home electric solar system included increasing rate hikes when nat gas should have been resulting in declining rates ... ratepayers continue to suffer increased energy expenses as I continuously predicted as a portion of ' screwflation'. ==================================================== Who should pay for San Onofre fiasco? The answer is obvious Shareholders collect dividends while ratepayers pay tens of millions of dollars a year for a defunct nuclear plant. It's time for the PUC to step up. About $1 billion in payments for the useless San Onofre nuclear plant has flowed out of customer pockets into the coffers of Edison and San Diego Gas and Electric since the plant's January 2012 shutdown. By Michael Hiltzik June 7, 2013 There may be lots of questions yet to be answered about Southern California Edison's permanent shutdown of its San Onofre nuclear plant, but here are a couple about which there's no doubt. Who's responsible? Edison, 100%. Accept no argument that it did the best it could in overseeing a $700-million generator replacement project, but accidents happen. This wasn't an accident: It was the product of what Edison claims was its rigorous oversight of contractors. How much should Edison's customers pay for the misengineering and mismanagement that led to mothballing a hugely important generating station? That's easy. The answer is nothing. Not a dime. San Onofre Nuclear Generating Station won't reopen San Onofre shutdown will mean tight electricity supplies San Onofre nuclear plant closure tied to finances Why is San Onofre nuclear plant closing? How much will this cost? San Onofre neighbors no longer felt safe, welcome closure What should happen to Edison electric rates right now? Also easy. They should be cut immediately by roughly 5%, which a back-of-the-envelope calculation says is the proportion of average electric bills represented by San Onofre. The task remains, however, of persuading the California Public Utilities Commission that these are the right answers. The PUC's own division of ratepayer advocates says the conclusion should be obvious: "They've been collecting costs for a facility that isn't operating and useful," says Mark Pocta, program manager at the division. Unfortunately, the PUC's history in this affair is discouraging. The division of ratepayer advocates and other consumer groups have been urging the PUC for more than a year to take San Onofre's cost out of its rate base, so that customers wouldn't be stuck for more than $600 million a year Edison has been permitted to charge to run a nonfunctional plant. The commission didn't get around until November to ordering Edison even to track those costs in a special account so any ultimate refunds could be calculated. And until it acts further, you, me and all the other 6.8 million paying customers of Edison and San Diego Gas and Electric, its minority partner in San Onofre, will be forking over more than $68 million a month. Roughly $1 billion in payments for the useless plant has flowed out of customer pockets into the utilities' coffers since its January 2012 shutdown. Some of that may be refunded to customers, but not for years. That's a consequence of the PUC's consistent inaction on a regulatory issue that should have had its undivided attention starting in that distant January. It's worthwhile to examine here the balancing calculation that Edison undertook in deciding to shutter San Onofre. On one side were the ratepayers; on the other, shareholders. The company brass has consistently signaled that the interests of the latter should trump the former. Speaking to investment analysts in April, Ted Craver, chairman and chief executive of Edison International, stated that "all material costs related to San Onofre are recoverable" from ratepayers, with the exception of money it hopes to snarf up from insurance policies and Mitsubishi Heavy Industries, the builder of the bad generators. And at an investor conference just nine days ago, Craver made clear that the most important factor in Edison's decision about running or closing San Onofre was what the PUC would say about charging ratepayers for the fiasco. "Without clarity on cost recovery from the CPUC, this means that our shareholders are essentially underwriting the risk of the recovery.... We can't put our shareholders in that position." (Some clarity: Craver gave no indication then that the company was within nine days of closing the plant.) So the shareholders continue to collect $1.35 per share in annual dividends while a plant accounting for 20% of the company's electricity generation sits idle. And ratepayers continue to pay tens of millions of dollars a year for the same nonfunctioning shell. One of Craver's other remarks hinted at how Edison will argue that ratepayers should swallow the bill for management's abject failure. "We continue to believe that the actions taken and costs incurred," he said, "have been prudent." Edison's chief financial officer, Jim Scilacci, used nearly the same language during a call with investors Friday, after the shutdown announcement. The company spent some $700 million on equipment designed and built, it says, under its own watchful eyes. The job was so badly done that the equipment turned the plant into a useless hulk. This is prudence? Lawyers have a Latin term that sums up the proper response. Res ipsa loquitur: "The thing speaks for itself."www.latimes.com/business/la-fi-hiltzik-20130608,0,1949781.column ============================================================== jeffolie predicts…2013 Predictions January 1st Make your predictions for 2013. Here are mine: jeffolie predicts…2010 food crisis that I made in 2008 will continue in 2013 for selective commodities such as grains with special attention to the seasonal trends for midyear tops from continuing weather issues. jeffolie predicts...stock market gains to mid year which is the traditional seasonal high hence the long standing cliche of 'sell in May and go away' after the debt limit issue resolves and after the tax filing and tax returns procedures have been finalized by the IRS tweaking the seasonality to possibly coming as early as March. jeffolie predicts… SCREWFLATION: everything the ‘average American family’ buys goes up in price and everything they own goes down in value. Taxes, fees, charges, special assessment districts from State, Local, etc governments will rise while services from them will decrease. Energy expenses for homes, cars, electricity will rise compounded by additional taxes and fees. Food prices will rise. Health care/insurance expenses will rise; College Tuition will rise; Mortgage/house payments will rise because interest rates will rise seasonally; Rents will rise. Food Stamp use will make new records. I prefer screwflation over stagflation because of the regressive impact on middle and lower class families' standard of living and that they have no investments that rise with inflation or money printing and in fact usually have their wealth tied up in declining or negative home equity while the upper 20% of earners usually have investments that will rise in 2013 outside of their home equity. jeffolie predicts… EUROPEAN CRISIS: the financial crisis will increase as the year progresses. Average European families will have their version of screwflation as govt’s increase taxes and cut support. The euro will survive and weaken during 2013. Jeffolie predicts…US GDP and inflation will decline in 2013 from 2012 using govt. numbers. jeffolie predicts…US STATES, CITIES, LOCAL AGENCIES CRISIS: major layoffs by the end of 2013, bills will not be paid, some bonds will default. Read more: www.unlawflcombatnt.proboards.com/thread/11891/jeffolie-predicts-2013-predictions-january##ixzz2VehtC7Mq
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Post by jeffolie on Jun 9, 2013 6:29:46 GMT -6
A long cooling-off period for San Onofre nuclear plant Tearing down San Onofre's two nuclear reactors will be a technically complex job completed over decades. It's likely Southern California Edison will first mothball the plant. San Onofre nuclear power plant to be closed permanently Activists praise San Onofre closure, but 1,100 layoffs expected San Onofre neighbors no longer felt safe, welcome closure San Onofre shutdown will mean tight electricity supplies Los Angeles Times June 8, 2013 It is likely that Edison first will mothball the plant, which under federal rules could keep its imposing imprint on the Orange-San Diego County coastline for another half-century. When the plant does come down, it will be a massive job. Tons of highly radioactive fuel now stored in pools will have to cool before the rods can be moved to concrete pads outdoors. Giant pipes that extend more than a mile into the ocean will have to come out. Pieces of the reactors will have to be cut with special saws and torches that reach 20 feet into the vessels' cooling water. “They do very highly engineered cuts and stack the pieces like Pringle potato chips,” said John Christian, a division president at EnergySolutions, which is decommissioning a nuclear plant in Illinois that also has two large reactors similar to San Onofre’s. Three-foot-thick walls of steel-reinforced concrete at San Onofre will have to be fractured by mechanical shears and carefully hauled out. Wrecking balls and dynamite are seldom, if ever, used in decommissioning nuclear plants. Debris then would be sent on special rail cars to dumps that can accommodate low-level radioactive waste. Right now, the only two such sites in the U.S. are in Utah and Texas. An estimated 3 million pounds of spent fuel at San Onofre is so radioactive that no repository exists that can handle it, meaning it will have to remain in concrete casks on the coast for decades, if not indefinitely. "It is a difficult job but not impossible," said Kevin Crowley, director of the nuclear and radiation studies board at the National Research Council. "The difficulty is separating the contaminated parts." Edison officials said Friday that they would permanently shut down the two reactors after an effort to replace the plant's steam generators resulted in an outage that has lasted more than a year. The tubes inside the new generators began wearing out more quickly than expected and sprang a small leak of radioactive steam before the plant was shut down last year. Edison officials have estimated that the ultimate cost of closing San Onofre will be $3 billion. The company has $2.7 billion in a trust fund, money collected from its customers each time they pay for electricity. Separately, the shutdown could cost the company hundreds of millions in lost profit. The decision to close the plant may affect nuclear utilities around the country that also must decide whether to make massive investments in old plants. A dual reactor plant in Florida was shut down this year when its steam generator replacement went awry. "This is now four reactors that shut down this year for the same reason — nuclear economics," said Dave Lochbaum, director of nuclear safety projects at the Union of Concerned Scientists and a former nuclear plant operator. "As older plants face major cost updates, operators are going to be looking at this." Edison has yet to formally notify the Nuclear Regulatory Commission about its plans to close the plant, let alone its long-range plan to decommission it, according to a company spokesman. At a news conference Friday, Edison executives said it would take "multi-decades" to decommission the plant, whereas industry experts say it takes about 10 years to do the actual demolition work. The NRC allows utilities to either tear down old reactors or put them into what it calls safe storage for up to 60 years. Eight nuclear power plants around the country are in safe storage, while 16 reactors are in the process or have completed decommissioning, according to NRC records. The decision on when to tear down a plant depends on many factors, including worker safety, cost, contamination and future land use, experts say. By allowing the plant to sit for decades, some radioactivity will decay and workers will get less exposure during the demolition. In addition, the San Onofre site has had leaks of radioactive tritium and some contamination is believed to exist in the groundwater under the plant. Tritium decays quickly, and waiting three decades could mean the cost of cleaning it would be substantially reduced. "There is no need to proceed quickly," former NRC Chairman Dale Klein said. "The most important issue is worker safety." Edison may see little benefit in moving quickly. Rail spurs that would carry the contaminated debris, for example, would pass near residential neighborhoods, potentially creating another controversy for the company. But other experts argue that it is better policy to clean up contaminated reactors as quickly as possible. "The cost is certain now, the technology is in hand and disposal routes are known," said Christian, the official at EnergySolutions. For one thing, a quicker decommissioning will return the land to beneficial use sooner. The San Onofre plant sits on 84 acres along the Pacific, with about 600 feet of ocean frontage. Edison leases the site from the U.S. Marine Corps, so it does not have the financial incentive of selling the property. Edison officials said the decision to shut down the plant was pure economics. The company was bearing about $1 million per day in costs to keep the plant ready to restart while the NRC considered its plan to operate one of the reactors at 70% of full power. A spokesman at the Nuclear Energy Institute, a trade group, said the industry has successfully replaced 60 steam generators across the nation and has made $90 billion in investments to support nuclear power, asserting that Edison's problems at San Onofre were unique. But the controversy may not be over. According to Klein, the entire San Onofre issue became highly politicized and never got a fair technical review. Sen. Barbara Boxer (D-Calif.), he said, went overboard in criticizing the plant as the NRC was weighing action. Boxer is chairwoman of the Senate Committee on Environment and Public Works. "She came close to impinging on the independence of an agency that she oversees," he said. Boxer's staff disputed that view, saying the senator was within her authority. Boxer issued a statement that she "is just doing her job." www.latimes.com/news/local/la-me-san-onofre-nuclear-20130609,0,6165116,full.story
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Post by jeffolie on Jun 15, 2013 7:37:47 GMT -6
The amount SCE paid us this year increased and most likely will continue to increase over the next 2 years ... my surplus electricity sold to the grid is increasing
Why?
Less kids at home: 1. 1 bought a condo 1.5 years ago 2. 2 have stay over night relationships thus their lights are off at night in their rooms 3. the youngest has been working full time and not using his high electrical demand gaming systems
When all have left home, then our electrical useage, demand will have declined to a more consistent, lower level ... most likely 2 years from now.
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Post by jeffolie on Jun 15, 2013 8:26:44 GMT -6
BIG SOLAR'S PUSH: replace dead nuke powerBig Solar dominates utilities and govts approach for crony capitalism guaranteed profits. The developers, contractors collect loans and then pay their managements bonuses plus shareholders dividends when the loans to perform the Big Solar developements first become funded ... afterwards, the poor electrical performance plus bankruptcies leave the taxpayers holding the bagfor Chinese manufactured solar panels. Below an editorial entirely ignores Small Solar while only glossing over the corrupt Big Solar approach. ======================================================================== Life after San Onofre is green: Editorial By Los Angeles News Groupdailynews.com June 14, 2013 " Clean, safe, too cheap to meter" - crazy as it may seem, that was the mantra of the nuclear power industry in the 1950s and '60s. What seems like blatant corporate propaganda from the vantage point of 2013 was at the time somewhat understandable. Clean? No smokestacks, that's for sure. Safe? Chernobyl was in the future. Cheap? That was the promise of the nuclear engineers, who failed to take into account that little problem of disposing of radioactive waste. In the wake of the Fukushima disaster in Japan, the tide has turned against nuclear power worldwide, probably irrevocably. Even formerly die-hard nuclear power proponents, who still like the technology for its major advantage of no greenhouse gas emissions, now acknowledge that from a public-relations standpoint, their goose is cooked. And the very idea of building a nuclear plant on a coastline, where a tsunami such as the one that hit Japan can endanger the world, seems foolhardy. That's why Southern California Edison's decision this month to finally shut down the San Onofre nuclear plant in northern San Diego County was correct. It would have been correct even absent the leaky tubes that have plagued the plant since a retrofit several years ago. But it turns out that decommissioning San Onofre is going to be a lot harder than building it. Rather than a matter of a few years, experts say that it could be half a century before the plant is gone. It's not just the 3-foot-thick,steel-reinforced concrete walls. The problem from hell: 3 million pounds of spent fuel so radioactive that there is no repository engineered to take it. Nuclear power without a plan for its waste was a monumentally terrible idea. But so is burning coal, which contributes so mightily to global warming. As it looks to energy sources for a sustainable future, SCE needs to get truly serious about going green. Compared to these properly discredited power sources, investing in solar and wind power right now looks cheap indeed. Yes, they have their own problems - solar arrays use a lot of land; wind turbines kill birds. But cloudy Germany already produces 3 percent of its power with solar, with a goal of 25 percent by 2050. California's deserts have sun, wind and room to spare. Let's stop sending future generations the problems of our energy follies. www.presstelegram.com/news/ci_23455303/life-after-san-onofre-is-green-editorial
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Post by jeffolie on Jul 12, 2013 8:27:28 GMT -6
Dead nuke speaks for itself, ratepayer folk out $Billions Crony capitalism in California helps SCE shareholders collect dividends on a deak nuke power plant " .... So the shareholders continue to collect $1.35 per share in annual dividends while a plant accounting for 20% of the company's electricity generation sits idle. And ratepayers continue to pay tens of millions of dollars a year for the same nonfunctioning shell. my jeffolie view: one of the reasons my sweet wife Olie and I escaped SCE by installing a home electric solar system included increasing rate hikes when nat gas should have been resulting in declining rates ... ratepayers continue to suffer increased energy expenses as I continuously predicted as a portion of ' screwflation'. our solar escape: Dead nuke speaks for itself " ... the high cost. ... I grew up in Long Island, home of the ill-fated Shoreham nuclear power plant. When that was finally shut down by the governor in 1989, the electric bills of Long Island residents went up substantially. Almost all of the $6 billion cost of that plant was passed on to local utility customers. It remains to be seen how much more of the SONGS plant will be paid by SCE customers. my jeffolie view: one of the reasons my sweet wife Olie and I escaped SCE by installing a home electric solar system included increasing rate hikes when nat gas should have been resulting in declining rates ... ratepayers continue to suffer increased energy expenses as I continuously predicted as a portion of ' screwflation'. ============================================== How long will customers continue to pay for a decommissioned San Onofre?: Steve Scauzillo 07/10/2013 This SONGS will not remain the same. That's because the San Onofre Nuclear Generating Station, shut down since January 2012, will be closed permanently. The crippled nuclear power generating plant owned by Rosemead-based Southern California Edison and its parent, Edison International, will be no more. But the question is, will SCE customers remain the same? Will customers (and that includes yours truly) keep paying the bill for this plant and its decommissioning? Will the people of south Orange County and north San Diego County -- about 8.7 million people who live within a 50-mile radius -- be the same, as in safe?
According to stories in the Orange County Register, the City Council of Irvine called for the massive plant to be shut down not long after the tubes and pipes within the gigantic steam generators began vibrating so much that they sprang a leak. A small amount of radiation was released into the environment. The problem was traced back to 2009 and 2011, when SCE replaced old steam generators that were wearing out with two steam generators made by Mitsubishi Heavy Industries. Two more were installed in Unit 3 in 2010 and one of them developed the leak. I guess for SCE, parts is not parts. My mechanic, who works on our 14-year-old Rodeo, had a similar problem. He said the hoses needed replacing but that we had to wait for him to order the genuine parts from Isuzu. That's where the comparison ends. If our family car breaks down, 9 million people are not exposed to radiation. If our SUV's parts don't work, radiator steam could leak and that would be unpleasant. But what is at stake for giant nuclear generating plants such as SONGS is off the charts. Safety issues are just one of many compelling reasons why nuclear power is too risky. For starters, they produce radiation and radioactive waste. Not good things. The Register reports SONGS has 4,000 tons of radioactive waste stored. Will that stay there? Will it be taken to a dump? SCE has said that it will take decades to decommission SONGS. The first step is to move the nuclear fuel out of the nuclear reactors. Note to self: I want to be out of Southern California when they do that. With so many alternatives in the Edison portfolio, I don't see why nuclear power should be one of them. In fact, Edison deserves a lot of credit for moving toward building and buying energy from solar, wind and natural gas-powered plants. Think about an earthquake near San Onofre, though it was built to withstand a 7.0 quake. Not much assurance. If SONGS is damaged, the ripple effect in Southern California will be exponentially greater than if it weren't there. In Japan, the Fukushima nuclear power plant was also designed to withstand a 7.0 quake. The 9.0 shocker and the resulting tsunami exposed the Fukushima's nuclear reactor's core. Finally, there's the issue of the high cost. I grew up in Long Island, home of the ill-fated Shoreham nuclear power plant. When that was finally shut down by the governor in 1989, the electric bills of Long Island residents went up substantially. Almost all of the $6 billion cost of that plant was passed on to local utility customers. It remains to be seen how much more of the SONGS plant will be paid by SCE customers. On Wednesday, state Sen. Alex Padilla, D-Pacoima held a hearing on the topic. Padilla and those in the utility regulation industry have their work cut out for them. www.presstelegram.com/opinions/ci_23636826/how-long-will-customers-continue-pay-decommissioned-san
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Post by jeffolie on Aug 12, 2013 14:54:40 GMT -6
SCE should be forced to pay from its profits or reserves ... because their bad decisions to select bad equipment which failed quickly after the equipment installation caused the shutdown ... not a political nor a ratepayer shift against nuke power
SCE kicked this failed nuke power plant to the curb as trash and should not get back 'investment money' for bad investing ... this should be a loss for the risk taking shareholders5 million electric bills will go up ... to avoid risk takers from suffer losses from their risk taking choices ... this unfair approach should not be happening but I predicted increased electric bills for the most common America in my "SCREWFLATION" section of my Jan 1st predictions ... not fair but I predict more unfair living expenses to go higher unfairly as wellmy jeffolie view: one of the reasons my sweet wife Olie and I escaped SCE by installing a home electric solar system included increasing rate hikes when nat gas should have been resulting in declining rates ... ratepayers continue to suffer increased energy expenses as I continuously predicted as a portion of ' screwflation'. ==================================================== Edison tells customers they should pay for San Onofre shutdownAugust 12, 2013, SACRAMENTO -- Closing the San Onofre nuclear power plant is in the "best interests" of Southern California Edison's 4.9 million customers and those ratepayers should be prepared to pay a portion of the shutdown costs. That's the message in a public letter published as a full-page advertisement in the Los Angeles Times on Monday. "If a utility asset must be retired before the end of its expected life, the utility recovers from customers its reasonable investment costs," Edison wrote www.latimes.com/business/money/la-fi-mo-edison-tells-customers-they-should-pay-for-nuke-shutdown-20130812,0,4633495.story
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Post by jeffolie on Aug 23, 2013 6:19:26 GMT -6
On San Onofre, Edison is trying to pull a fast one Don't be fooled by Edison's PR push. It is shareholders, not ratepayers, who should pay for the utility's massive screw-up at its San Onofre nuclear plant. By Michael Hiltzik August 20, 2013 If you love political campaigns, you should be grateful to Southern California Edison. That's because it has already started its campaign to get you to pay for its egregious blunder in wrecking its San Onofre nuclear plant. San Onofre, of course, is that full-figured fiasco on the coast in northern San Diego County. Replacement steam generators that Edison installed at the plant in 2010 and 2011 to extend its useful life for 20 years proved to be defective, leading to a complete shutdown in January last year. For more than a year the utility claimed it could fix the generators and eventually reopen San Onofre, but it finally decided in June to mothball the plant permanently. Since then, Edison, its regulators at the Public Utilities Commission, and ratepayer advocates have been girding for a long battle over who should pay for the disaster. The costs at issue include not only the higher price of electricity Edison has had to buy to replace San Onofre's lost output, but the original expense of building the existing San Onofre plant in the 1980s (one older unit was built in the 1960s and shut down for old age in 1992), and the $680 million Edison paid for the defective generators. Edison is asking the PUC to allow it to recover about $2 billion for its capital expenditures alone through 2017, including a return on its capital investment of more than 5.5%. The PUC would have to decide how to apportion that sum between ratepayers and shareholders. PUC hearings on this all-important question are scheduled to begin in mid-October, with a public forum scheduled for Oct. 1 in San Diego. Edison plainly has decided to start making its case to the public now. The first major shot in this effort — the firing on Ft. Sumter, if you will — was sounded last week, when the utility published an open letter to its customers in the form of an ad in The Times and several other Southern California newspapers. To the credit of Edison's publicity department, the letter bore all the hallmarks of high-priced campaign advertisements so familiar to us in California: It was misleading, disingenuous and altogether untrustworthy. The letter's key point, buried beneath layers of ad-speak, was this: You, the customer, should bear a share of those costs. "The American utility system works because everybody is in it together," Edison said. "Everyone shares the benefits and the costs," a line which I believe was part of the original lyrics to the song "Kumbaya." Edison said that it would be doing its damnedest to recover damages from its insurers and from Mitsubishi Heavy Industries, which designed and built the faulty generators. But it's leaving little doubt that, regardless of what it's able to recover, it wants its shareholders and its Wall Street investors to be "made whole" financially. Instead, it's hoping to make you, the customer, pay. "They're attempting to change the debate on the politics of money by painting themselves as victims," observes Matthew Freedman, a lawyer at the consumer advocacy group Turn who is following the proceedings closely. That's been Edison's approach almost since the shutdown began. According to its official narrative, Edison was an upstanding, prudent utility snookered into thinking that Mitsubishi knew what it was doing in developing the state-of-the-art generators. Imagine Edison's shock at discovering that the units, which were supposed to last 20 years, suffered debilitating wear and tear because of internal vibrations after less than two. Indeed, that's the theme of the claim Edison filed against Mitsubishi in July. The Japanese firm "specifically assured Edison that it had the tools and expertise to analyze factors that could lead to tube wear," the claim states. "It is now clear that many of Mitsubishi's representations and promises were false." But these statements sound less like factual assertions than the sort of accusations flung around in the course of a bitter divorce — which the Edison-Mitsubishi relationship rather resembles. What's left unsaid is that Edison participated in the generator design and manufacturing. A federal inspection report last year documented that Edison's oversight was thorough. Edison knew that the project would tax Mitsubishi's capabilities — the units would be "a significant increase in size from those that Mitsubishi Heavy Industries has built in the past," an Edison executive wrote to his Mitsubishi counterpart in 2004. Accordingly, Edison engineers signed off on many elements of the generator design. When potential problems arose, Edison and Mitsubishi engineers sat down to work them out together. Edison quality-control staff were in residence at Mitsubishi's manufacturing plant all the while the generators were being built. You won't find an acknowledgment of that in Edison's open letter to its customers, not even between the lines. Instead, it suggests that the shutdown of San Onofre was an unavoidable event, an act of God, as though the plant was devastated by a Sharknado.Edison's basic pitch is that the Wall Street investors who originally put up the money to build and upgrade San Onofre should recover their investment, plus a tolerably decent profit, regardless of what Edison did with their cash (such as sinking it in a nonfunctional power plant). The investors, Edison said in a filing last week with the PUC, deserve to be "made whole for their original investment over the course of the [plant's] estimated useful life" — for San Onofre, that period originally ran to 2022. The fact that San Onofre didn't make it to that point is immaterial, Edison says. Sometimes a plant lasts a lot longer than its estimated life, in which case ratepayers get the excess output effectively for free; sometimes it falls short, in which case the ratepayers should eat the shortfall. The idea is that things will even out over time, the way an ump's bad call against the home team in the eighth inning just makes up for a bad call against the visitors in the third. Edison says the consequence of limiting its payback from ratepayers, and thus loading the costs of the shutdown on shareholders and investors, would be to increase its cost of capital, which would impose higher costs on "everyone." This position would give Edison a free pass for imprudence and incompetence. The investors who supposedly should be made whole put their faith in an Edison management that broke a multibillion-dollar power plant. These investors made a bad call. Tough. Make them shoulder the costs, and perhaps they'll be more discerning in the future about the quality of the management they're investing with. Ratepayers, unfortunately, had no choice — Edison is the monopoly power provider in its service area, and the customer doesn't get a say in who runs the company. What's most cynical about Edison's argument is that although it claims it decided to shut down San Onofre for the public interest, it really did so to protect its investors — more precisely, to protect its position in the capital markets. Regulators never said the utility might not or should not be able to reopen San Onofre in time; it just appeared that government approval might take so long that investors would get antsy. Now, although the premature retirement is sure to impose substantial new costs on ratepayers, the investors still should be made whole? Over the years, the PUC has been rather tolerant of a string of Edison mishaps at San Onofre and elsewhere. That era may be coming to an end. Just last month PUC Commissioner Mike Florio, a former Turn attorney who is overseeing the San Onofre proceedings, said he would have a "hard time" understanding why he should vote to let Edison collect the full cost of replacement power for San Onofre from ratepayers while still allowing the utility to collect the full cost of the plant itself. Edison's recent filing and its letter to customers are indirect responses to that. It sounds as if the utility knows it's on thin ice. That's where it belongs. www.latimes.com/business/la-fi-hiltzik-20130821,0,2146386.column
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Post by jeffolie on Aug 25, 2013 16:34:40 GMT -6
Experts Grapple With Finding the True Value of Solar Does that value equal “rough justice” for solar? Herman K. Trabish: August 22, 2013 GTM reported earlier this week on a filing made by The Alliance for Solar Choice (TASC) that exposed potentially serious tax liabilities in net energy metering (NEM) alternatives for solar. TASC was forced into submitting the filing to the Arizona Corporation Commission after Arizona Public Service, the state’s biggest electricity provider, proposed two alternatives to its NEM program. APS believes NEM shifts the burden of paying for transmission and distribution from solar owners onto its other ratepayers. One APS alternative is imposing a flat charge on solar owners for infrastructure costs. But numbers in the APS filing with the Arizona Corporation Commission (ACC) show that such a charge would compromise rooftop solar’s value proposition. The other alternative is to bill solar owners at retail rates for all their electricity but remunerate them with a “bill credit” at a lower, ACC-set rate for all the electricity generated by their systems. Some in the solar industry think a feed-in tariff or value-of-solar tariff would be better than net energy metering or either of the APS proposals. But the TASC filing contained a legal memo from Skadden, Arps, Slate, Meagher & Flom LLP partners Sean Shimamoto and Emily Lam finding that a feed-in tariff or value-of-solar tariff might require solar owners to pay income tax for the returns on their system's electricity generation. A feed-in tariff (FIT) provides an above-retail payment to solar system buyers for all their production. It successfully drove solar growth in Germany and other countries, but many in solar believe current low PV prices make such an expensive incentive unnecessary. “Continue net metering, but build a FIT program alongside it,” said Paul Gipe, often called the godfather of the U.S. FIT movement. “Once the feed-in tariff program is successful, regulators and the industry can choose whether to continue net metering.” Gipe agreed with the Skadden attorneys’ conclusion that FIT remunerations are taxable. “If you earn income, you pay taxes on it.” “The VOST is first a calculation of the costs and benefits of distributed solar. Then comes rate design, which can be good or bad,” explained Rabago Energy principal Karl Rabago, a former Texas utility commissioner and one of the key designers of the first VOST, which he helped develop during his tenure at Austin Energy. Austin Energy was aware of the taxable income issue when the incentive was being designed, Rabago said. “VOST gets around the taxation for income the same way NEM gets around it. The remuneration for electricity produced by the solar system is treated as a credit on the bill, not a payment.” APS described its bill credit program as a buy-all, sell-all arrangement. In such a program, Rabago explained, the solar owner loses title to all the electricity generated by the system because it is sold. That is also typically how a FIT works, he added. Both would make income from rooftop solar taxable. “The Skadden memo is completely right about that issue, and I am really glad somebody raised it.” Austin Energy’s VOST, Rabago said, “keeps its quantifications on the customer’s side of the meter. The utility does not pay. It credits the customer. But instead of using the retail rate as the credit value, like NEM does, it uses the VOST value as the credit amount.” The core of the Skadden memo, Rabago explained, is that the IRS does not see the sale of less than 20 percent of a system’s output as generation for sale. A VOST can be structured to make it a credit for consumption, Rabago said, but you have to get the rate design right. “In the Skadden memo, they wrote that a VOST and a FIT are the same thing. But in a footnote, they acknowledged that it is rate design that matters.” At Austin Energy, Rabago said, he intentionally included “indicators that customers were not generating for sale, like zeroing out the credits at the end of the year instead of paying off the balance. That provision shows they are generating for consumption.” The Austin Energy legal staff reviewed and approved the VOST as not creating taxable income, Rabago added. Rabago says that his intention is not to discredit the NEM concept. It was created to drive growth when there was very little solar adoption. The retail rate, which at the time was just a convenience, has turned out to be pretty close to solar’s value, Rabago said. “It just doesn’t pick up all the benefits and all the costs. That is why people call it 'rough justice.' Maybe it is the only justice solar can get. With the value of solar tariff, I tried to improve on the justice.” The fundamental question is the value of solar, agreed Crossborder Energy principal Tom Beach, perhaps the foremost NEM expert. That value can be used to create a VOST, or it can be compared with the net metering credit, Beach said. “If it is 'rough justice,' policymakers can keep net metering in place. If the value of solar is higher than the retail rate, they can add incentives. If it is lower, they can put a charge on net-metered customers or change the rate design.” www.greentechmedia.com/articles/read/rough-justice-for-rooftop-solar
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