All posts by Duncan Gilchrist

Reflecting on Sierra Club’s ‘Building a Carbon Free Grid’ Conference

This month, I had the opportunity to represent Clean Energy Action at the Sierra Club’s ‘Building a Carbon Free Grid’ conference in New Orleans, where hundreds of lawyers, energy economists, policy experts and organizers convened to strategize over the technical and movement-building requirements to achieving a just transition away from fossil-fuel powered electricity system towards one that is powered by renewable energy.  Over the course of three inspiring, information-rich days, dozens of panelists provided a broad survey of the work that is being done across America to facilitate the transition to a renewably-powered future; the grassroots campaigns, the economic analyses and the legal battles. Since the conference, a few realizations have been solidified in my mind and they’re mostly good news:

  1. The movement for energy democracy is alive and well.

Perhaps the most inspiring takeaway is the realization that the fight for energy democracy is alive and well and the fight is taking place across the United States from California and Colorado to Mississippi and Philadelphia.  Take for example the work of Soulardarity, a non-profit in Highlands Park, Michigan that is combatting energy poverty by installing community-owned solar powered street lights after their utility, DTE Energy removed over 1000 streetlights from the community to cut costs.  Or consider the work of One Voice, a non-profit from Jackson, Mississippi that is educating and empowering historically disadvantaged community members to run for leadership positions within Mississippi’s rural electric cooperative utilities that provide electricity to 50% of the state’s population.  These are just two examples among many of organizations that are harnessing the opportunity to regenerate economic and political power amidst the transition towards a clean, affordable, flexible energy system.

  1. Clean energy portfolios are a cost-effective and technically-feasible alternative to natural gas generation.

A second huge take away from the Building a Carbon Free Grid conference is the understanding that as coal-fired power plants are retired across the country, utilities need not rush to build new natural gas plants.  Rather we can replace coal-fired generation capacity with clean energy portfolios and expect similar or cheaper electricity rates, lower emissions and similar or better grid-reliability services compared to natural gas-fired electricity generation.  Consider findings from a report by Rocky Mountain Institute titled ‘The Economics of Clean Energy Portfolios,’ which demonstrates that our vision for a 100% clean energy system is the least cost option AND it is technically feasible, today.  The report features 4 real-life case studies of utilities across the country that are considering their options for building new electricity generation, showing that in each case, building out clean energy portfolios would be cost-competitive, equally reliable and allow utilities to circumvent ill-advised investments in natural gas plants that may become stranded assets sooner than we expect.

  1.  There are multiple paths towards a clean energy future.

The last key takeaway, and perhaps a launching point for further discussion, is the realization that multiple paths exist towards the destination of 100% clean energy — paths that differ in notable ways.  Some paths prioritize policies that regenerate political and economic power within communities most-impacted by climate change. Others define success more narrowly as the integration of large amounts of renewables + storage as quickly as possible by whatever means available.  As society moves towards a carbon-free grid we would do well to explore all possible paths that exist and weigh the respective benefits and drawbacks of each. Key questions that will help communities assess their options are: ‘Who will foot the bill for bad investments in coal and natural gas?’;  ‘who will own the solar panels,wind turbines, storage devices or even the local grid when they are built?’; ‘who will determine how our energy dollars are being invested?’; ‘how will the eventual savings realized from making the switch to RE + storage and microgrids be passed onto average citizens?’.  

These questions are especially crucial to Coloradans, Xcel Energy having recently announced its plan to replace 2 of its coal-fired power plants with record low-cost wind, solar and storage.  Though Xcel’s announcement comes as good news to the folks at Clean Energy Action that have led a grassroots movement of citizen-advocates for over a decade to move Xcel away from imprudent fossil fuel investment towards renewables, the challenge for CEA and other just transition advocates will be to ensure that consumers are not forced to foot the bill for Xcel Energy’s stranded fossil fuel assets.  This challenge will continue to rear its head for years to come as the plummeting cost of clean energy threatens the financial viability of Xcel’s remaining fleet of coal and natural gas plants. (Sign up for Clean Energy Action’s newsletter to stay abreast of efforts to ensure that Xcel Energy replaces its remaining coal plants with renewables in a manner that is just for ratepayers.)

Overall, the Building a Carbon Free Grid Conference was inspiring and refreshing —  I am now certain that we will win this fight. We are already winning across the country at the state and local level thanks to the many individuals and organizations that have dedicated their lives to the vital work of transforming our energy system.

Bourbon Street, New Orleans

Reflecting on Sierra Club’s ‘Building a Carbon Free Grid’ Conference

This month, I had the opportunity to represent Clean Energy Action at the Sierra Club’s ‘Building a Carbon Free Grid’ conference in New Orleans, where hundreds of lawyers, energy economists, policy experts and organizers convened to strategize over the technical and movement-building requirements to achieving a just transition away from fossil-fuel powered electricity system towards one that is powered by renewable energy.  Over the course of three inspiring, information-rich days, dozens of panelists provided a broad survey of the work that is being done across America to facilitate the transition to a renewably-powered future; the grassroots campaigns, the economic analyses and the legal battles. Since the conference, a few realizations have been solidified in my mind and they’re mostly good news:

  1. The movement for energy democracy is alive and well.

Perhaps the most inspiring takeaway is the realization that the fight for energy democracy is alive and well and the fight is taking place across the United States from California and Colorado to Mississippi and Philadelphia.  Take for example the work of Soulardarity, a non-profit in Highlands Park, Michigan that is combatting energy poverty by installing community-owned solar powered street lights after their utility, DTE Energy removed over 1000 streetlights from the community to cut costs.  Or consider the work of One Voice, a non-profit from Jackson, Mississippi that is educating and empowering historically disadvantaged community members to run for leadership positions within Mississippi’s rural electric cooperative utilities that provide electricity to 50% of the state’s population.  These are just two examples among many of organizations that are harnessing the opportunity to regenerate economic and political power amidst the transition towards a clean, affordable, flexible energy system.

  1. Clean energy portfolios are a cost-effective and technically-feasible alternative to natural gas generation.

A second huge take away from the Building a Carbon Free Grid conference is the understanding that as coal-fired power plants are retired across the country, utilities need not rush to build new natural gas plants.  Rather we can replace coal-fired generation capacity with clean energy portfolios and expect similar or cheaper electricity rates, lower emissions and similar or better grid-reliability services compared to natural gas-fired electricity generation.  Consider findings from a report by Rocky Mountain Institute titled ‘The Economics of Clean Energy Portfolios,’ which demonstrates that our vision for a 100% clean energy system is the least cost option AND it is technically feasible, today.  The report features 4 real-life case studies of utilities across the country that are considering their options for building new electricity generation, showing that in each case, building out clean energy portfolios would be cost-competitive, equally reliable and allow utilities to circumvent ill-advised investments in natural gas plants that may become stranded assets sooner than we expect.

  1.  There are multiple paths towards a clean energy future.

The last key takeaway, and perhaps a launching point for further discussion, is the realization that multiple paths exist towards the destination of 100% clean energy — paths that differ in notable ways.  Some paths prioritize policies that regenerate political and economic power within communities most-impacted by climate change. Others define success more narrowly as the integration of large amounts of renewables + storage as quickly as possible by whatever means available.  As society moves towards a carbon-free grid we would do well to explore all possible paths that exist and weigh the respective benefits and drawbacks of each. Key questions that will help communities assess their options are: ‘Who will foot the bill for bad investments in coal and natural gas?’;  ‘who will own the solar panels,wind turbines, storage devices or even the local grid when they are built?’; ‘who will determine how our energy dollars are being invested?’; ‘how will the eventual savings realized from making the switch to RE + storage and microgrids be passed onto average citizens?’.  

These questions are especially crucial to Coloradans, Xcel Energy having recently announced its plan to replace 2 of its coal-fired power plants with record low-cost wind, solar and storage.  Though Xcel’s announcement comes as good news to the folks at Clean Energy Action that have led a grassroots movement of citizen-advocates for over a decade to move Xcel away from imprudent fossil fuel investment towards renewables, the challenge for CEA and other just transition advocates will be to ensure that consumers are not forced to foot the bill for Xcel Energy’s stranded fossil fuel assets.  This challenge will continue to rear its head for years to come as the plummeting cost of clean energy threatens the financial viability of Xcel’s remaining fleet of coal and natural gas plants. (Sign up for Clean Energy Action’s newsletter to stay abreast of efforts to ensure that Xcel Energy replaces its remaining coal plants with renewables in a manner that is just for ratepayers.)

Overall, the Building a Carbon Free Grid Conference was inspiring and refreshing —  I am now certain that we will win this fight. We are already winning across the country at the state and local level thanks to the many individuals and organizations that have dedicated their lives to the vital work of transforming our energy system.

Bourbon Street, New Orleans

 

Anadarko Shareholders File Class Action Lawsuit Against Company

A class action lawsuit filed by shareholders against Anadarko Petroleum paints a picture of a company with a culture of putting production ahead of safety.  The suit, with information provided by nine former employees and two contractor employees, says the company “repeatedly and deliberately” violated multiple Colorado safety regulations.  These violations led to the explosion of a home in Firestone, CO on April 17, 2017, killing two people and injuring a third.

According to the suit, Anadarko’s widespread violations of the Colorado Oil & Gas Conservation Commission (COGCC) safety rules “…all but guaranteed a disaster”.  The lawsuit alleges that negligence and safety violations by the company caused share prices to fall, hurting investors.  The lead plaintiff is the Philadelphia Ironworkers Benefit and Pension fund, which owns Anadarko stock.

One of the former employees states that a single person was responsible for checking the safety of all of Anadarko’s flow lines in the Wattenberg field in Weld County.  Twelve to twenty people would have been needed to adequately do the job.  The lawsuit states that “this employee brought up the issue of inadequate staffing with her superior approximately 12 times between late 2016 and March 2017, when she quit in disgust”.

The lawsuit concludes that “Anadarko’s senior executives… callously disregarded known, widespread violations of the [COGCC’s] rules that endangered the Colorado communities in which Anadarko did business.  They lied about it to the Commission.  They lied about it to investors.  They violated the securities laws.”

Events Leading Up to the Firestone Explosion

In October of 2013, Anadarko and its chief competitor in the Wattenberg field, Noble Energy, exchanged ownership of approximately 100,000 acres of land in the Wattenberg field in Colorado – the Land Swap.

Through the Land Swap, Anadarko acquired more than 1,550 existing wells, most of which had been drilled up to 50 years before in rural areas of Weld County and were in desperate need of repairs or needed to be plugged and abandoned altogether. These wells included the Firestone Well, which was drilled in 1993.

Starting in the early 1990’s, the area grew rapidly and developers built houses close to the wells. The COGCC does not require companies to disclose to the public or to developers the location of oil and gas lines.  It does, however, have regulations in place to protect public safety.  The lawsuit alleges Anadarko routinely violated five of the Commission’s regulations:

1) Rule 1102 a. (2) – “[w]henever an operator discovers any condition that could adversely affect the safe and proper operation of its pipeline, it shall correct it within a reasonable time.”

2) Rule 1101 a. – all pipelines shall be locatable by a tracer line or location device to facilitate the location of such pipelines.

3) Rule 1102 d. – flowline and pipeline locations must be registered with the Utility Notification Center, CO 811. CO 811 operates a hotline for information about the location of flowlines that utilities companies and the general public can call before digging to ensure they do not rupture flowlines.

4) Rule 1101 e. (1) – every year all flowlines must be pressure-tested to their maximum anticipated
operating pressure.

5) Rule 1103 – every abandoned pipeline shall be disconnected from all sources of natural gas and petroleum and cut off and sealed at the ends. Notice of such abandonment shall be filed with the Commission and with the local governmental jurisdiction. This rule applies even if a flowline is not located near a building.

Because Anadarko routinely failed to comply with these five regulations, as development encroached closer and closer to the old wells developers severed flowlines without being aware they had done so.

Even knowing this, Anadarko elected to turn on many of the old wells in desperate need of repairs because lease terms required Anadarko to actually operate the wells in order to maintain its lease. If Anadarko lost a lease, it would have to renegotiate it with the owner of the mineral rights. Since the leases were often signed decades earlier, at prices much lower than today’s prices, it was top priority for Anadarko to maintain these old leases so they wouldn’t have to be renegotiated.

The Firestone Well was one of those old Land Swap wells which had been turned on. However, when the well was activated “…Anadarko’s measurements did not report any methane production through the meter, a physical impossibility.  Though Anadarko had sent a work crew to inspect this anomalous result,  the overworked employees had not found the problem.  The flowline had leaked methane into the home, which exploded when the homeowner tried to install a heater”.

“Following the explosion, Anadarko admitted that 2,400 of its flowlines had been abandoned, but not sealed, in violation of Commission Rule 1103. Anadarko also added an additional 400 wells to the list of wells it needed to plug and abandon, more than doubling the number of wells on that list”

Read the complete Class Action Lawsuit here.

Xcel’s Colorado Energy Plan “Stipulation” – Another Xcel “Deal” That is Not a Deal At All

In late August 2017, Xcel-Colorado (Public Service Company of Colorado or “PSCo”) submitted a plan to the Colorado Public Utilities Commission (“PUC”) which it named the Colorado Energy Plan or “CEP.”  The Colorado Energy Plan was submitted to the PUC as a “Stipulation” in Docket 16A-0396E and the CEP is sometimes referred to as “The Stipulation.”  While Xcel’s Colorado Energy Plan includes moving up the retirement date for two coal plants—Comanche 1 and 2 in Pueblo, Colorado—the Plan also contains a number of adverse provisions including:

  • Reducing Xcel’s Renewable Energy Standard Adjustment which is supposed to be used to support renewable energy additions and using the “head room” created by that reduction to pay off the undepreciated portion of Comanche 1 and 2.
  • Paying Xcel their full level of profit (known as “return at the WACC” or Weighted Average Cost of Capital of about 7 %) on the now stranded coal plants.
  • Establishing ownership targets for Xcel ownership of replacement generation, potentially reducing the competitive nature of Colorado’s energy market.
  • Including natural gas in the replacement generation and potentially constraining the analysis of the over 50,000 MW of very cost-effective wind, solar and storage bids that Xcel received in November 2018.  The CEP would consider adding about 2000 MW of wind and solar to Xcel’s Colorado system, leaving over 90% of the wind, solar and storage bids “on the table.”

Clean Energy Action Board member Leslie Glustrom submitted extensive comments on the “Stipulation” and a final statement.

Photo Courtesy of Alan Best

In addition, Clean Energy Action hosted several trainings on the CEP/Stipulation in late January 2018 and numerous citizens that attended the trainings testified at the Colorado PUC on February 1, 2018 in Docket 16A-0396E.  Many citizens pointed out that Xcel’s Colorado Energy Plan “deal” was not as good a “deal” as Xcel wanted the Commission to believe it was.

On Wednesday March 14, 2018 the Colorado PUC allowed Xcel to bring forth a plan that retires Comanche 1 and 2 early, but did not accept many other parts of the Colorado Energy Plan “Stipulation.”  The decision is here.

Unfortunately the Colorado PUC did not specify that Xcel should develop a plan that no longer uses “must-run” requirements for Xcel’s Colorado coal plants, but it did require a “least-cost” modeling run which should begin to show the vast potential for lowering utility costs by incorporating low-cost wind, solar and storage onto Xcel’s Colorado system.  Importantly, the sensitivity runs with lower discount rates should show even greater savings from adding wind, solar and storage resources.  The modeling report is expected in late April 2018.

The mission of Clean Energy Action is to “accelerate the transition to the post-fossil fuel world,” and we are strong supporters of retiring coal and natural gas plants, but we will also advocate for a “just transition” that does not unduly burden utility ratepayers. The Colorado Energy Plan, while containing some admirable proposals, transfers too much accountability for stranded fossil fuel assets from Xcel to its customers.