By Vernon Robison
A century ago, American author Mark Twain was quoted as saying, “There are lies, damned lies, and then there are statistics”. This statement has never been more true than it is today. In our modern world of technology and the internet; where we are literally swimming in raw data available at our fingertips at any time; statistics are twisted constantly to say whatever an activist, politician or special interest group wants them to say; never mind the kernel of truth from which the statistics may have originated.
A recent example of this is in the ongoing debate over the future of the Reid Gardner Power Generating Station in Moapa. This coal-burning power plant has become a target of environmental groups who want to see it closed down. A lot of statistics have been thrown around, twisted, turned and contorted to prove various points on this issue. Coal-generated power being the highly emotional topic that it is, many of these interpretations have tended to leave the facts far behind and strike out into the territory of pure fiction.
NV Energy, the owner of Reid Gardner, has been required by the Public Utilities Commission of Nevada (PUCN) to gather data on the Moapa plant and present a set of conclusions about the facility’s future. The process has taken place under a regulatory microscope. Each detail, every claim made by the utility, is being publicly scrutinized.
Through that process, the company has concluded that the preferred option would be to spend a significant amount of money on new emissions technology at Reid Gardner which will meet the strictest environmental guidelines. In doing this, the aging plant can sustain an extended lifetime of generating needed power for the region in a safe and relatively clean way. Despite the significant expense on the retrofits, NV Energy has looked at the data and determined that the plant can still make both power and profit for the company in the long term. What’s more, the coal-generated power, now cleaner than ever, would actually save the ratepayers money.
Of course that is just one interpretation of the data.
The environmentalist group, Sierra Club, has looked at the same data and declared the glass half empty. In a recent response to the NV Energy projections, made to the PUCN, the Sierra Club determined that NV Energy would actually be financially better off to (surprise, surprise!) close down Reid Gardner once and for all. The report claims that closing the plant next year would bring $59 million in savings. What’s more, there would still be plenty of power to supply NV Energy customers without Reid Gardner.
Well that is quite a chunk of money! No doubt, NV Energy officials would welcome the opportunity to save that kind of dough for their shareholders.
Unfortunately, it may not be that simple. The trouble is, the Sierra Club report has so twisted the data that even their own people have trouble explaining the conclusions. When the enviro-emotion is taken out of the equation for a moment, and you enter the real world of energy supply and demand, the Sierra Club report just doesn’t seem to jive with the facts.
Much of the Sierra Club report seems to be pegged to the idea of instituting aggressive efficiency measures among the NV Energy customer base. Of course, anyone would agree that efficiency is a good idea. But does an efficiency program really cut costs for the ratepayers?
It is true that such a program would give ratepayers a fantastic bargain when they purchase new insulation, energy saving appliances or other efficiency infrastructure for their homes or businesses. Typically, an efficiency program will offer cash rebates and other incentives to ratepayers for purchasing such items. This would also lower the monthly power bill by a few bucks a month. Sounds like a good deal, right?
But who actually pays for all those rebates and incentives? NV Energy doesn’t just go out and pluck the cash for such programs off of the money tree. For NV Energy, the ratepayers are the money tree. Those programs have to be priced into – yes that’s right – the monthly power bill. Every person’s power bill goes up just a bit to pay for it.
The fact is, these efficiency programs are just a shell game, churning money from one hand to another. Yes, they may have the effect of saving some energy. But no matter what circuitous accounting route you use to materialize these rebates and incentives, the simple fact is the cost is still just picked from the ratepayers’ pockets.
Of course, when pressed to give an explanation, the Sierra Club folks will say that the administration of these programs is all very complex and hard to grasp. Just trust them, they work! But I expect that there is a much simpler explanation than that. The way I see it, such programs just force ratepayers to pay a lot more money for using a little less power. That’s no kind of solution from ratepayer point of view.
Another statistic being heavily massaged by the Sierra Club report deals with the regional power supply. The report claims that NV Energy is sitting atop a huge 5,000 megawatt surplus of power generation. If this is true, our little Reid Gardner station, generating its 500 megawatts, is not even remotely needed and obviously ought to be closed down.
But this claim seems absolutely absurd! Why in the world would NV Energy, a for-profit entity that must answer to its shareholders, voluntarily carry such a huge surplus on its books? What possible motivation would there be in collecting unnecessary power plants, like so many squares on a game board, only to have them sit idle because the region can’t use all that power fast enough?
For a moment, though, let’s just set that question aside and inspect the Sierra Club data a bit more closely. If we do, we will find that this alleged surplus is based on factors like the availability of additional solar energy recently acquired by NV Energy; that old energy efficiency program being recommended by the Sierra Club (yep, back to that again); and the extension of some other existing power contracts. These are the factors that are bringing this alleged “glut” of regional power.
Well, if NV Energy has to depend on those kinds of factors to replace Reid Gardner, one can see why the company is a little reticent about jumping right in and close the plant next year.
We’ve already discussed the follies of the efficiency program so let’s look briefly at the prospect of renewable energy replacing Reid Gardner. The trouble is, the reliability of all these new solar power acquisitions are a bit shaky to say the least. While some politicians have claimed that the sun always shines in Nevada, the fact is that we are still subject to a dark sky at night. And, believe it or not, we do still have a cloudy day every once in a while. Funny though, I quite like to use electricity to light my way at night. I personally prefer it to candles and oil lamps. And, of course, I still need it to do business even on cloudy days. Most people are in the same boat, I think.
As attractive as the idea of renewable energy is, the fact remains that renewable resources can’t yet be depended upon to produce base load power in an economically viable way. Clicking one’s heels together and wishing just won’t make it so! Thus it is understandable that NV Energy is hesitant to give up Reid Gardner’s dependable and relatively cheap energy for the unknown quantity of renewables. If they throw all their eggs into the renewable energy basket that way, they may have a messy situation, for both shareholders and ratepayers, when the bottom of the basket falls out.
Of course, the non-profit do-gooders at the Sierra Club have never really had to worry about those pesky problems of actually having to produce something in the economy and to turn a profit while doing it. Still it is nice of them to try and advise NV Energy on how to do their business, don’t you think?
Perhaps at this point it goes without saying that the Sierra Club isn’t really worried about NV Energy’s bottom line. Likewise they are not really concerned about saving money for the ratepayers or anyone else. Their only agenda item in this whole episode has been to shut down every coal burning plant in America whatever the cost.
Throughout the long regulatory process with federal and state agencies discussing the future of Reid Gardner, the Sierra Club has not wanted to be bothered with the facts. Never mind the millions of dollars that NV Energy has spent, and will spend, on making Reid Gardner an exemplary coal burning plant; cleaner than most of its kind. Never mind the importance that Reid Gardner plays in providing power resources to the region and in acting as a hedge to volatile market forces in the energy sector. Never mind that Reid Gardner’s relatively cheap resource brings a shellgame-free benefit that ratepayers can truly take to the bank. And finally, never mind the vital role that Reid Gardner plays in the regional economy bringing jobs and livelihood to hundreds of employees and their families.
Never mind the facts! The Sierra Club has its agenda and they’re sticking to it. And they have more than enough “lies, damned lies and statistics” to back it up.