NIMBY FUD

[Brian H]

Lerner wrote: It’s a political decision. If people let the utilities reap a windfall, they will. But people can decide that every dime of savings from FF is passed through to users. The question is how “sunk costs” are treated–you can wipe them out, or preserve them. And ,by the way, small investors hold like 1% of untility stocks.

Of course the cost of electricity will not fall overnight because as FF is phased in we will still be burning a lot of fossil. But the speculative premium will get wiped out fairly quickly. Oil would fall to around $10 or less.

You also have to take into account that things will change far more rapidly over the next few years due to the crisis, before FF can be a factor. The depression might already have bankrupted most of the utilities, we don’t know.

Stranded costs and similar considerations are relevant only when dealing with comparable quantities. The “wipe out” option is very much on the table here.

Implementation will take time (though only the blink of an eye in comparison to the usual lead times for power projects), but I hold that the simple EXISTENCE of the new economics and the new source changes everything. Despite what bureaucrats and regulators might attempt to impose and assert.

[Rematog]

Brian,

I would guess you’ve had little direct dealings with government regulators.

I’ve seen state environmental regulator departments require all roads on a plant site paved, to prevent dust (we were already watering roads twice a day to prevent dusting. This on a manufacturing plant surrounded by corn fields (which when plowed, harvested, etc., can create a lot of dust.). The reason for the requirement was that the computer model the regulator agency used to model pollution impacts from smokestacks automatically failed the stack, even with ZERO emissions, if there was an unpaved road inside the site “bubble”.

I’ve had an inspector require a plant to tear out a brand new underground pipeline and replace the brand new safety valves on an anhydrous ammonia tank because the wind blew his inspection paper work away while he was walking back to his car. It took petitions to the agency heads to get the inspector to accept replacement paper work.

My point is, regulators do NOT have to be logical, by outside (of their agency) standards. They only have to enforce the regulations, as the agency and the courts have interpreted them.

And remember, that if the utility is being “unfairly” hurt by the changes, they will go to the courts for re-dress. If the regulatory agency for political reasons is “taking” utility assets, they will have a strong case.

[Brian H]

Rematog wrote: Brian,

I would guess you’ve had little direct dealings with government regulators.

I’ve seen state environmental regulator departments require all roads on a plant site paved, to prevent dust (we were already watering roads twice a day to prevent dusting. This on a manufacturing plant surrounded by corn fields (which when plowed, harvested, etc., can create a lot of dust.). The reason for the requirement was that the computer model the regulator agency used to model pollution impacts from smokestacks automatically failed the stack, even with ZERO emissions, if there was an unpaved road inside the site “bubble”.

I’ve had an inspector require a plant to tear out a brand new underground pipeline and replace the brand new safety valves on an anhydrous ammonia tank because the wind blew his inspection paper work away while he was walking back to his car. It took petitions to the agency heads to get the inspector to accept replacement paper work.

My point is, regulators do NOT have to be logical, by outside (of their agency) standards. They only have to enforce the regulations, as the agency and the courts have interpreted them.

And remember, that if the utility is being “unfairly” hurt by the changes, they will go to the courts for re-dress. If the regulatory agency for political reasons is “taking” utility assets, they will have a strong case.

I don’t doubt it for a moment. Ever heard of Jerry Pournelle’s ‘Iron Law’? Basically, paper-pushers take control of every organization and agency over time. HOWEVER — I hold that the scale of this change will defeat even their power.

[Author]

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