Nuke’m High: CPS Board votes 5-0 for nuclear power
Down Fighting: CPS Energy Board Chair Aurora Geis insisting withering green-power plans aren't withering green-power plans.
Board Chair Aurora Gies opened the special meeting of CPS Energy’s Board of Trustees in a bunker in the bowels in the Alamodome with a defense of the utility’s clean-energy pursuits. “We don’t want to compromise our pursuit of other technologies,” Geis said. “We want to be able to support these technologies as they mature in the future.”
While her insistence that nuclear expansion will in no way limit the city’s ability to aggressively pursue cleaner options has become an expected soundbite over the past months, today’s — offered moments before a unanimous vote to devote itself to nuclear power expansion — was especially anemic.
Over the past week, it has come out that the utility, to mitigate increasing tough financial pressures (of which the taking on of hundreds of millions of future debt load for nukes is a large part) CPS Energy will have to delay previously planned pollution controls at the city’s coal plants. It will also likely delay the development and roll-out of advanced meter systems and an improved “smart” grid, both necessary steps to reaching the utility’s stated commitment to a pollution-free, decentralized power model.
All this even as future rate hikes of 9.5 percent begin to be batted about.
CPS’s co-CEO Steve Bartley claimed “broad” support for the plan and
flashed a list of a dozen area chambers of commerce on the screen.
Suggesting that cutting back from the previously recommended 40-percent
ownership was “prudent” — “particularly in light of the financial
condition we continue to see ourselves in in this community.”
A deeply nuanced Hennigan warned of what risk he saw in the deal. “On paper we are the stronger of the partners from a bond perspective,” he said of 50-50 partner and recent bankruptcy recoveree NRG Energy. “If one of our partners gets in trouble, we own that risk.”
The utility currently owns half of the estimated $13 billion project, though staff have been recommending selling down to a 40-percent share. City Council resistance and increasing financial pressures forced them to back down even further. Now, 5-0, the board is advocating selling down to 25 percent.
So far, no one’s been found to pick up the previously undesired 10 percent.
And yet the meeting closes with another lecture from Geis on future-future green-energy plans?
Overheard at back of the bomb shelter: “She’ll be saying that even as she’s eaten up by radioactivity.” [On that point: consult the third installment of my nuclear power series. On the streets in the a.m.]
The matter will next be taken up by the City Council, where city leaders must decide whether going in potentially as deep as $1 billion before the full costs of the project are understood (2012?) makes for a reasonable energy policy.
In a deeply considered, if meandering, statement before the vote, Hennigan offered one indisputable fact: “The future is going to be very different.”
Geis said the Alamodome was chosen as an alternative venue to allow for large crowds. In my head, the teaser from the movie Alien kept rattling around: "In space, no one can hear you scream."
Yeah. In space or the basement of the Alamodome.
Here's the language of the resolution:
RESOLUTION APPROVING SELECTION OF SOUTH TEXAS PROJECT
UNITS 3 & 4 AS CPS ENERGY’S NEXT BASELOAD GENERATION RESOURCE
WHEREAS, CPS Energy is an electric and gas utility with an obligation to provide electric service to all of the customers within its certificated electric service territory; and
WHEREAS, CPS Energy is deeply committed to conservation and energy efficiency and renewable energy supplies, supporting a diverse portfolio of power generation and there is a need to replace our existing fossil fuel baseload generation supply, but CPS Energy staff has determined that conservation and energy efficiency and renewable energy supplies alone cannot reliably meet San Antonio’s (the City’s) growing demand for electricity and therefore, additional baseload generation is needed to bridge the gap to the City’s energy future; and
WHEREAS, the CPS Energy staff due diligence team continues to believe, consistent with our adopted Strategic Energy Plan, that additional nuclear generation is worth pursuing to meet San Antonio’s growing energy needs because nuclear is likely to generate long-term reductions and savings in fuel costs and currently appears to be the most reasonable generation resource among the realistic alternatives; and
WHEREAS, following public hearings throughout San Antonio, CPS Energy has determined that it should retain enough equity in STP Units 3&4 (the Project) to satisfy the projected demand for energy of CPS Energy customers while also maintaining competitive rates; and
WHEREAS, CPS Energy staff is developing alternatives for retaining an interest in the Project, retaining a significant voice in Project governance, and allocating a portion of CPS Energy’s equity position in the Project to third parties in order to broaden the equity base and mitigate development risk; and
WHEREAS, CPS Energy’s participation in and commitment to the Project is dependent on approval of continued funding by the Board and the City Council;
NOW THEREFORE, be it resolved by the Board that:
1. Even with the conservation and energy efficiency to be achieved by the Save for Tomorrow Energy Plan (STEP) Energy and Efficiency Conservation program, we find the need to meet expected growth in demand for electricity by increasing generation capacity to maintain system reliability;
2. We authorize CPS Energy management to continue development of the Project on behalf of CPS Energy and we direct CPS Energy staff to pursue alternatives for managing risk with respect to its equity interest in the Project so that the value of its equity interest is optimized for CPS Energy and its customers, while protecting the financial integrity of CPS Energy and the City, and to attempt to divest equity interests in a reasonable and prudent manner, so that after pursuing divestitures and other strategies, CPS Energy retains ownership of approximately 20% to 25% equity interest in the Project;
3. A copy of the 2009 Estimated Rate Plan is attached to this Resolution and we direct CPS Energy staff throughout development of this Project to annually develop and file with the City an updated ten-year rate plan that will assure the financial integrity of CPS Energy and the City helping to maintain strong credit ratings, while also keeping rates affordable and funding capital plan priorities as approved by the Board. We direct CPS Energy staff to cooperate with the City staff to continue its public process for development of the Project and rates that are reasonable for funding CPS Energy’s capital and operations and maintenance plans; however, the Board acknowledges that future rate filings may deviate from the ten-year rate plan (up or down) to maintain the financial integrity of CPS Energy and the City; and
4. We approve this resolution today while also resolving to spend at least one third (1/3) of the amount of funds spent annually on development of new nuclear energy resources to be spent on renewable energy resources in furtherance of CPS Energy’s Sustainable Energy Policy Statement.
Posted by gharman on 10/13/2009 5:32:54 PM
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