Renewable Energy and the U.S. Power Grid

Utah's 10-Year Energy Plan

Will renewable energy take over the electrical grid? Some seem to think so, and not just those who are in the business of selling the benefits of going green. A report by Edison Electric Institute (EEI), and executives at NRG Energy and Pacific Gas & Electric explains why this could be the case as renewable energy has been getting closer and closer to being competitive with conventional fossil fuels. New technology is being developed, new ways of storing intermittent sources (such as wind and sun) are being found, and greater use of renewable energy is being promoted by the U.S. Government through grants.

In Utah, Governor Herbert's 10-Year Energy Plan has identified goals to help move the state forward with innovative energy development.

Through the Recovery Act Energy Efficiency and Conservation Block Grant (EECBG), the Utah State Energy Office is managing funds to improve energy efficiency and reduce total energy use and fossil fuel emissions in communities while directing all of its State Energy Program funding to local city and county governments that did not receive direct EECBG grants from the Department of Energy.

To name a few, the Utah State Energy Program has used grant funds to support the “Solar for Schools” program, a statewide energy education initiative that will install 73 solar panels at schools throughout the state, with at least one display in each of the state’s districts. The program has also built a demonstration house that is being used in training workers to find ways to make homes of low-income residents more energy efficient. And along with the grant and UAMPS, a nonprofit agency based in Salt Lake City, 14 rural communities across the state have replaced streetlights with efficient LEDs.

To read more about the 10-year Energy Program, see here.

To read more about the “Economics of Renewable Energy”, see the report from the National Bureau of Economic Research.

A View on the Role of Natural Gas in the U.S. Economic Future

As economists we always look toward the economy of the future and look for potential areas of change or areas that will lead in growth or will bring about changes to the economic structure. This article in U.S. News and World Report looks toward how the ongoing natural gas boom in this country could contribute to future growth and the future composition of America’s industries and infrastructure.
U.S. News and World Report

“Despite a slow recovery from the Great Recession, America is on the brink of a long-term economic boom, says author Charles Morris, former managing partner of the business consulting firm Devonshire Partners. In "Comeback: America's New Economic Boom," Morris argues that the natural gas boom will encourage investment in America's infrastructure, increase productivity and create millions of middle-class jobs". Read more

Questar rate request would add $16 to typical bill in Utah

Questar Gas is asking the state’s top utility regulators for permission to increase its general rates by $19 million.

If approved by the Utah Public Service Commission, the company’s request would push up the monthly bill for a typical natural gas customer by $1.36, or $16.32 a year.

The requested 2.5 percent increase is designed to cover the rising costs of maintaining and expanding it’s natural gas distribution system, Questar said.

"This is necessary to ensure our system’s reliability and safety," Craig Wagstaff, Questar Gas executive vice president and chief operating officer, said in a statement. "Even though we’re investing more into our infrastructure to meet customers’ energy needs, we work hard to aggressively control our operating costs and provide natural gas services at rates that are consistently among the lowest in the country."

States where natural gas rates are lowest in cost per 1,000 cubic feet include:

Source: U.S. Energy Information Admin, 2011

Salt Lake Tribune

Natural gas rate hike would cost typical Utah user $50 more a year

For most of the past five years, Utahns have enjoyed the benefits of an abundance of natural gas that has kept the lid on monthly bills for the fuel used to keep their homes warm and their water hot.

But a recent rebound in the price from a five-year low means that’s likely about to change to the tune of about $50 a year for the typical residential customer.

Questar Gas is asking state utility regulators for permission to increase the amount it collects by $61 million.

If the state’s Public Service Commission gives the OK, the average monthly bill will increase by around 7 percent, or about $3.95, beginning June 1. Salt Lake Tribune

Consumer spending up, income drop largest in 20 years

The Commerce Department said on Friday consumer spending increased 0.2 percent in January after a revised 0.1 percent rise the prior month. Spending had previously been estimated to have increased 0.2 percent in December.

January's increase was in line with economists' expectations. Consumer spending accounts for about 70 percent of U.S. economic activity and when adjusted for inflation, it gained 0.1 percent after a similar increase in December.

Though spending rose in January, it was supported by a rise in services, probably related to utilities consumption after a cold snap during the month.

Spending on goods fell, suggesting some hit from the expiration at the end of 2012 of a 2 percent payroll tax cut. Tax rates for wealthy Americans also increased.

The impact is expected to be larger in February's spending data and possibly extend through the first half of the year as households adjust to smaller paychecks, which are also being strained by rising gasoline prices.

GDP advanced at a 0.1 percent rate in the last three months of 2012, with consumer spending rising at a healthy 2.1 percent annual pace.

Income tumbled 3.6 percent, the largest drop since January 1993. Part of the decline was payback for a 2.6 percent surge in December as businesses, anxious about higher taxes, rushed to pay dividends and bonuses before the new year.

Taking into account the higher taxes that went into effect at the start of the year, the squeeze on households was even greater. The income at the disposal of households after inflation and taxes plunged a 4.0 percent in January after advancing 2.7 percent in December.


Excluding the unwinding of the dividend and bonus boost, disposable income increased 0.3 percent in January.

With income dropping sharply and spending rising, the saving rate - the percentage of disposable income households are socking away - fell to 2.4 percent, the lowest level since November 2007. The rate had jumped to 6.4 percent in December.

Savings were the smallest since December 2007.

Inflation was largely contained, even though gasoline prices pushed higher. A price index for consumer spending was flat for a second straight month.

That left its increase over the past 12 months at 1.2 percent, the smallest since October 2009. It increased 1.4 percent in December.

So-called core prices, which strip out food and energy costs, edged up 0.1 percent after being flat the prior month. The year-on-year gain was 1.3 percent, the smallest since April 2011 and well below the Federal Reserve's 2 percent target.

The U.S. central bank last year embarked on an open-ended bond buying program and said it would keep it up until it saw a substantial improvement in the outlook for the labor market. It hopes the purchases will drive down borrowing costs.

Weak growth and benign inflation could compel the Fed to maintain it's very easy monetary policy stance. Reuters

Utah No. 3 in the country for geothermal power

Geothermal power production grew in the United States by 5 percent last year, with Utah ranked No. 3 in the country for its generation of power by tapping super-heated water thousands of feet underground.

Highlights of geothermal power's growth, the number of projects in development and challenges in developing the renewable energy were detailed in an industry briefing Tuesday in Washington.

The United States is the No. 1 producer of geothermal power in the world, with 3,386 megawatts of installed capacity, according to numbers released by the Geothermal Energy Association. Seven new projects came online last year, including the first hybrid solar-geothermal plant.

Across the country, 175 geothermal projects are in development, and as many as 14 more plants could be operational this year if they meet construction schedules.

California remains the top producer of geothermal energy, with 2,732.2 megawatts of installed capacity, and 33 projects in the wings. Nevada is next at 517 megawatts of installed capacity, followed by Utah at 48 megawatts. The majority of that comes from Rocky Mountain Power's Blundell plant, with power that stays in Utah.

"We actually really like geothermal energy," said Samantha Mary Julian, director of the Utah Office of Energy Development. "It is truly a clean, renewable energy and it has a unique quality that the others do not. It is a base power that goes all the time, not just when the wind is blowing or the sun is shining. It's just a clean product."

The report notes that Utah has 19 projects on the table with the potential to develop between 260 and 280 megawatts of power — and a handful of more prospects in the very early stages. Deseret News

Burn less money by using dropped prices for LED lights

LED lights have dropped in price, which means consumers can save about $69 or more a year for a three-bedroom house on a low-end estimate, according to an article in Stuff.co.

"Up until the last six months they were a little bit on the expensive side and a little on the dull side, and a little on the big side," Paul Crewther, owner of LED World in Auckland, New Zealand, told Stuff.co. "The manufacturers have made them smaller, brighter and cheaper."

Comparisons on savings differ, but LED World estimates that over a 10-year period, a 100-watt equivalent LED bulb will cost $74.09 to run compared to $493.20 for a regular incandescent bulb and $145.23 for a fluorescent energy-saving bulb. An LED could cost up to $36, which is on the high side of an estimate.

The advantage of LED’s is the projected 60,000 hours lifespan as opposed to the incandescent bulb's 1,500 hours. They also emit little heat. Until recently, however, bulb price has been a barrier for money-conscious consumers. Deseret News

Utility offering expanded solar incentives for Utah homes, businesses

Rocky Mountain Power customers can apply to receive cash incentives to help them offset the cost of installing solar energy systems on their homes and business this coming year.

The utility’s expanded Solar Incentive Program, which was authorized late last year by the Public Service Commission, is designed to provide $50 million to Utah residents over the next five years.

Potential participants, however, only have a limited time to apply. They must submit applications by Jan. 28, said Jeff Hymas, spokesman for Rocky Mountain Power.

Hymas explained the incentives amounts are for:

• Residential systems —$1.25 per watt up to a maximum of 4 kilowatts, or 4,000 watts
• Small businesses, churches, etc. — $1 per watt up to a maximum of 25 kilowatts, or 25,000 watts
• Large businesses — 80 cents per watt up to a maximum of 1,000 kilowatts, or 1 million watts

Based upon those numbers, a Utahn who wants to put a 4 kilowatt system on a home could get as much as $5,000 to help offset the cost of the project.


Joe Raycraft of Utah Solar & Alternative Energy Inc. in Park City estimated that a 4-kilowatt system would cost around $12,000 to $13,500 to install. "So, Rocky Mountain Power’s incentive could help offset quite a bit of the cost," he said.

He said the interest in solar power systems has been growing in recent years. More recently it has been given a boost by both the rising cost of electricity produced from the more traditional sources and the declining cost of solar power equipment.

In 2013, Rocky Mountain Power is hoping to provide funding to help Utah homeowners build solar power systems capable of producing a total of 500 kilowatts of electricity. It has funding to encourage small-business owners to build systems capable of producing 3,000 kilowatts of power and 3,000 kilowatts at large businesses.

"In addition to reducing the cost to install solar equipment, these incentives can help participating customers save money year after year through lower electricity bills," said Karen Gilmore, Rocky Mountain Power’s vice president of customer services.

Just as important, the incentive program also provides benefits to utility customers who don’t participate by reducing overall electricity use and demand on the utility’s system.

"Our analysis shows a net benefit of $1.63 for every dollar we put into the [solar incentive] program," Gilmore said.

To apply for the program, go to www.rockymountainpower.net/solar. Rocky Mountain Power will notify all applicants of the results of the lottery on Feb. 8. Salt Lake Tribune

Utah's Thirst for Water Comes with $13.7 Billion Price Tag

The ability to turn on the tap, flush the toilet and water the garden over the next 20 years will be a multibillion-dollar challenge in Utah because of new water and sewer systems that state officials say must be put in place.

A statewide list of water projects, including their costs, is being shopped to Utah lawmakers, along with the warning that it is better to plan now and pay now, rather than wait until dams fail or taps run dry.

The numbers are staggering, adding up to $13.7 billion. And that doesn't include billions identified for controversial projects such as the Lake Powell Pipeline or the Bear River Development project.

The Utah divisions of water quality and water resources and other public agencies compiled the list of water infrastructure needs in Utah that provides just one glimpse of a national problem decades in the making.

A roundtable highlighting the water infrastructure challenges across the country estimated the cost to maintain and replace drinking water systems alone at $1 trillion. Hosted by the Conservation Leadership Partnership, the discussion earlier this month took on new urgency as most of the nation continues to recover from the worst drought in 50 years.

The partnership is an initiative seeking to broker new alternatives to persistent conservation problems, emphasizing the need for public-private partnerships and entrepreneurship and "ground-up" solutions. Deseret News

Rocky Mountain Power settles rate case

Rocky Mountain Power has agreed to a two-part settlement in a pending rate case, a pact that will increase the typical Utahns’ monthly electricity bill by about $4.55 a month starting in mid-October, followed by another $2.48 cent hike in fall 2013.

The agreement —which also bars the public utility from seeking another rate increase before January 2014 —has the support of consumer advocates, the state’s Division of Public Utilities and many of the state’s large industrial energy users.

The Utah Public Service Commission is expected to schedule a hearing later this month to consider whether the settlement is in the public interest and should be approved.

Michele Beck, director of the state’s Office of Consumer Services, acknowledged the settlement appeared to give the regional utility company most of what it wanted. But, she explained, the settlement also benefits ratepayers by keeping rates down well into the future.

Beck said the utility also gave up its demand that Utah customers help pay for the cost of removing a dam on the Oregon- California border, a plan with would have cost Utah ratepayers $7.4 million annually for the next 10 years. Salt Lake Tribune

Utah electricity rates to increase in the fall

Utahns will soon pay more to turn on their lights with the announcement Tuesday of a rate increase by Rocky Mountain Power.

Residents will see the average electricity rates rise 5.64 percent beginning in October and an additional 2.89 percent in the fall of next year. That translates into an annual bill of $875.08 for the average household in Utah when the rate increases are in place by Sept. 2013.

In the agreement with the Public Service Commission of Utah, the state’s largest electricity utility will receive a $100 million rate increase this year and a $54 million rate hike in 2013. In exchange, the company would not make another rate increase request until at least 2014.

If final approval is given by the commission, the average residential household would see its monthly bill increase by about $4.55 in 2012 and $2.48 next year.

Rocky Mountain Power originally asked for a $172 million rate hike or 10.5 percent, but the director of the Utah Office of Consumer Services — the state’s watchdog agency — said the agreement would save ratepayers millions by avoiding another rate increase request for the next two years.

Rocky Mountain Power spokesman Dave Eskelsen said the revenue generated by the rate hikes would be used to make infrastructure improvements and meet ongoing operational costs.

Utah ranks among the states with the lowest utility rates in the nation.

A previous Deseret News report indicated that among eight states that make up the Mountain Region, Utah paid the second lowest residential electricity rates at 8.51 cents per kilowatt-hour as of October 2010. Only Idaho had a lower residential rate at 8.02 cents per kilowatt-hour — the lowest in the nation — while Nevada paid the highest regional residential rates at 12.18 cents per kilowatt-hour. Deseret News

Questar Gas wants to lower rates by $13.3 million

Responding to the continuing abundant supply of natural gas, Questar Gas Co. is asking state utility regulators to allow it to reduce the amount it charges its customers for the fuel by 1.68 percent, or $13.3 million a year.

If approved by the Utah Public Service Commission, the rate cut would lower the typical homeowner’s annual bill by $11.44, or roughly $1 a month.

Questar is hoping regulators will quickly approve the reduction request so it can appear on customer bills beginning Sept. 1.

Questar typically asks Utah regulators twice a year for permission to adjust the amount it charges its customers.

Yet since January 2011, the company’s requests — which are known as "pass-through" rate adjustment — have become a bit more frequent due to the falling price of the fuel brought about by a sharp increase in supply. Salt Lake Tribune

Utah Builds Business with Broadband

The Utah Broadband Project today released the Utah Broadband Advisory Council Report, which details the findings and recommendations of the Utah Broadband Advisory Council during its first year of meetings. The Utah Broadband Project formed the Council in June 2011 to convene key stakeholders to discuss the status of broadband adoption and deployment in the State of Utah. One key finding of the Council is that Utah has been attracting businesses due to the exceptional level of high-speed internet access and communications infrastructure that exists in the State.

“Utah enjoys a greater level of connectivity than many other states with similar population densities and geography, largely due to the collaboration that exists between public and private entities,” said Tara Thue, manager of the Utah Broadband Project. “We have found that many of these partnerships are unique to Utah and we are often asked to share these achievements with other states.” Utah Pulse

Utah refinery growth promises jobs, revenue, but at what cost?

Improved technology and higher oil prices for the first time are making it economically feasible for oil refineries to tap more of Utah’s large reserves of crude oil as thick as boot polish, potentially bringing jobs and millions in revenue to the state.

Upgrades proposed or under way at three of the state’s five refineries will enable them to process three times the amount of the paraffinic-based crude, commonly called black or  yellow wax petroleum, as they could six years ago.

But development will come at a cost.

Boosting production capacity could also increase certain environmental risks, based on refinery safety records over the past decades. Hundreds more oil tankers are expected to travel the 170 miles from the rich oil fields in eastern Utah to the refinery row that straddles the Salt Lake and Davis county lines, negatively impacting air quality, neighborhoods and traffic. Salt Lake Tribune

Questar asks approval to give each customer $34.50 refund

Questar Gas Co. said it has asked Utah utility regulators to approve an immediate $42 million one-time refund to its customers.

If approved, the refund will amount to about $34.50 for each customer and will appear as a credit on their May natural gas bills.

The one-time refund, which will be equal to about a five percent decrease in a typical Utahns natural gas bill, will give customers a more immediate reduction. Salt Lake Tribune

Utah an active player in geothermal market

Utah continues to be a strong player in the geothermal industry, outpacing most of its neighboring states in electrical generation and on tap to increase capacity with 11 projects under development.

A new report by the Geothermal Energy Association released Tuesday identifies eight additional geothermal prospects for power development  in Utah.

The annual U.S. Geothermal Power Production and Development Report tracked industry activity throughout 2011 and for the first quarter of 2012, indicating the geothermal industry experienced sustained and steady growth, adding 91 megawatts of newly-installed capacity. A megawatt is enough to power 500 homes. Deseret News

Utah lawmakers seeking to bury overhead power lines

Storms and overgrown trees can wreak havoc with overhead power lines, so lawmakers decided Tuesday to start seeking ways to finance burying them around the state.

Rep. Joel Briscoe, D-Salt Lake City, had introduced HB291 to pay for it by allowing cities to add a sales tax of one-tenth of 1 percent. But he told the House Public Utilities and Technology Committee he did that only to start discussion on the topic. He asked the committee to recommend the issue for study over the coming year, which it did. Salt Lake Tribune

Rocky Mountain Power requests 9.7 percent rate hike

Rocky Mountain Power has requested a price hike in a proposal to the Public Service Commission of Utah for $172.3 million — an overall 9.7 percent increase in customer rates.

If approved, the proposed increase would translate to an additional $7.89 per month on a typical residential customer bill. Deseret News

Utahns enjoy low energy prices, but changes looming

The American Coalition for Clean Coal Electricity, a utility group that opposes increased limits on coal use, said this year more than half of American families, or those with annual incomes of less than $50,000, will be spending as much as 20 percent of their annual incomes for energy.

Compared with the rest of the country, Utah families have been fortunate in terms of the increases they have been facing in their electricity and heating bills. At a time when electricity rates were doubling nationally, power bills in Utah rose only 42 percent while the cost of heating a home with natural gas has trended downward and now costs the typical family living in the state 22 percent less than a decade ago.

Tim Funk of the Crossroads Urban Center, an organization that serves and represents the interest of low-income residents of the state. He states, "But we also now have our power company — Rocky Mountain Power — telling us we’re going to be in for annual rate increases for a good number of years." Salt Lake Tribune

Census Bureau Reports Post-Recession Growth in 10 to 11 Service Sectors

The U.S. Census Bureau today released its 2010 Service Annual Survey, which shows that of the nation's 11 service sector, 10 showed an increase in revenues for employer firms between 2009 and 2010. Only the finance and insurance sector (NAICS 52) showed a loss ($27.2 billion, a loss of 0.8 percent).

“The statistics presented in this year's Service Annual Survey are noteworthy,” said Thomas Mesenbourg, the Census Bureau's deputy director. “We are able to present a six-year trend that clearly shows the impact the most recent recession had on certain service sectors. At the same time, the newly released 2010 statistics show that in some industries there is evidence of a statistically significant change in an upward direction.”

The Service Annual Survey provides the most comprehensive national statistics available annually on service activity in the United States. Since 2009, the survey was expanded to collect data for all service industries, capturing 55 percent of U.S. gross domestic product (GDP). Previously, the survey accounted for only 30 percent of GDP.

INFORMATION SERVICES SECTOR

“Increases varied widely across service sectors. For example, the information sector (NAICS 51) increased from $1.08 trillion to $1.1 trillion. Within this sector, Internet publishing and broadcasting (NAICS 516) continued to see increased revenues, up 11.3 percent from $19.1 billion to $21.3 billion in 2010.

Television broadcasting (NAICS 51512) increased 12.0 percent from $31.6 billion to $35 billion. Cable and subscription other programming (NAICS 5152) as well as wireless telecommunications carriers (NAICS 5172) also saw increases in revenue of 7.3 percent and 5.3 percent, respectively, to $55.2 billion and $195.5 billion.

However, revenues for newspaper (NAICS 51111) and periodical publishers (NAICS 51112) continued to fall. Newspaper publishers declined by 4.6 percent to $34.7 billion, and periodical publishers declined 1.8 percent to $38.4 billion. Wired telecommunications carriers (NAICS 5171) continued to decline, falling 2.3 percent to $168.8 billion.

OTHER SECTORS

Health care and social assistance revenue (NAICS 62) continued to increase for employer firms, rising to $1.9 trillion in 2010, an increase of 4.0 percent. Hospitals (NAICS 622) increased revenue to $822.6 billion, up 4.5 percent from 2009. Nursing and residential care facilities (NAICS 623) also rose 4.4 percent to $192.0 billion.

The finance and insurance sector (NAICS 52) had a small decline to $3.3 trillion in revenues in 2010, decreasing 0.8 percent from the prior year. Securities and commodity exchanges revenue (NAICS 5232) decreased 1.5 percent to $10.9 billion, while miscellaneous intermediation revenue (NAICS 523910) rose 16.0 percent to $23.6 billion.

Among other sectors covered by the Service Annual Survey:

• The utilities sector (NAICS 22) showed estimated revenues of $501.7 billion, an increase of 5.0 percent from $477.6 billion in 2009.
  
• Arts, entertainment and recreation (NAICS 71) increased 2.0 percent to $192 billion in revenue.
• Revenues for the transportation and warehousing sector (NAICS 48-49) were $640.2 billion in 2010, up 7.6 percent from $595.2 billion in 2009.
• The real estate rental and leasing sector (NAICS 53) had total revenues of $356.0 billion, up 1.8 percent from 2009. New subsectors added last year to this sector included real estate (NAICS 531) and lessors of nonfinancial intangible assets (NAICS 533).
  

See this survey: 2010 Service Annual Survey