Posts Tagged ‘Economy’

Peculiar Patriot Coal deal raises questions

Thursday, August 20th, 2015 - posted by Tarence Ray
A train leads up to a Patriot Coal site in Kanawha County, W.Va. Photo by Foo Conner | Jekko.

A train leads up to a Patriot Coal site in Kanawha County, W.Va. Photo by Foo Conner | Jekko.

What would a health care executive-turned-environmentalist want with the dying business of mining coal?

That’s the question some are asking after it was announced this week that Tom Clarke, a Virginia businessman, plans to acquire assets, and assume around $400 million in liabilities, from recently-bankrupt Patriot Coal through one of his companies, ERP Compliant Fuels.

The deal is part of an elaborate and untested business model that will allow ERP — an affiliate of the Virginia Conservation Legacy Fund — to continue mining Patriot permits in West Virginia, bundling this coal with “carbon offsets” accrued from planting trees, and selling these bundled products to electric utilities.

Because trees absorb atmospheric carbon, Clarke believes credits created through reforestation will help states meet carbon emissions targets set forth by the Obama administration’s Clean Power Plan. But the plan does not make clear that coal-carbon offsets will count towards states’ emissions targets.

According to The Roanoke Times, Clarke says he’s not in it for the money, but for the earth. But that isn’t clear from the available literature on ERP, which seeks to bring together a coalition of conflicting environmental and capital interests — “coal mining businesses, electric power producers, forestland owners, government, and the scientific community” — in order to reduce global CO2 emissions. In the same literature, Clarke and the ERP/VCLF tout their business partnership with Jim Justice, a notorious scofflaw mine operator who owes nearly $2 million in mine violation fines.

As if these relationships weren’t enough to raise suspicion, ERP/VCLF’s definition of a “carbon offset” is dubious. As The Roanoke Times points out:

It doesn’t matter that Clarke will target coal-fired electrical generating plants in the Ohio River Valley with his pitch, while the designated trees are in Central America and the U.S. South or would be planted in Appalachia. Carbon emissions spread in the atmosphere and the concentration evens out; a party that wants to offset its carbon output can fund tree planting or tree preservation anywhere and benefit the globe, he said.

If there’s no requirement that trees be planted on deforested land in Appalachia, what’s stopping ERP from destroying mountains and externalizing the costs onto Appalachian communities for the social mission of stopping climate change? How does ERP plan to address coal ash and mercury and the many other harmful externalities that are inflicted on communities as coal is mined, processed and burned? How will the company account for the numerous injuries, fatalities, and black lung incidences that result from both underground and surface mining? Coal’s impact goes far beyond CO2 pollution.

These are crucial questions to ask as the coal industry in central Appalachia undergoes massive structural changes. If the history of the coal industry in the region has taught us anything, it’s that we should be highly suspect of outside corporate interests looking to exploit the region’s natural resources.

This is just as true today, in an era in which investors and politicians stand to gain substantial material and social capital off of the region’s diversification.

Predictable politics giving way to popular support for POWER+

Tuesday, August 18th, 2015 - posted by brian
Photo of Wise County, Va., by Flickr user biotour 13 licensed under Creative Commons.

The politics surrounding the POWER+ Plan are less important to Appalachian communities than advancing initiatives that will create jobs and alleviate economic hardship. Photo of Wise County, Va., by biotour 13.

The recent growth in local support for a plan to boost Appalachia’s economy has been a bright spot in the region during some of the coal industry’s darkest days.

In Kentucky, Virginia and Tennessee, cities and counties with long histories of coal mining are advocating for the POWER+ Plan, a federal budget initiative proposed by the White House to build more diverse economies in the communities hardest hit by the regional coal industry’s decline.

Last week, the Board of Supervisors of Wise County, Va., unanimously approved a resolution supporting the plan, citing the “dramatic economic transition” and job losses the county has experienced. According to the resolution, the county “desires to invest resources to adapt to new economic circumstances” facing the region.

On the same night, the City Council of Benham, in Harlan County, Ky., passed a supporting resolution. Before Benham came the City of Whitesburg, Ky., and Virginia’s Cumberland Plateau Planning District Commission.

The Campbell County Commission became the first locality in Tennessee to support POWER+, unanimously passing a resolution yesterday. Also on Monday, members of the Letcher County Fiscal Court voted unanimously in favor of the plan.

The City Council of Whitesburg, Ky., is among the growing number of localities in central Appalachia that have passed resolutions supporting the POWER+ Plan. Photo by Kentuckians For The Commonwealth.

The City Council of Whitesburg, Ky., is among the growing number of localities in central Appalachia that have passed resolutions supporting the POWER+ Plan. Photo by Kentuckians For The Commonwealth.

It was only a few weeks ago that Norton, Va., became the first locality in the nation to pass a resolution in favor of the plan. More endorsements are expected in the days and weeks ahead.

Appalachian Voices and our allies have been promoting the POWER+ Plan, too. We’re heartened, but not surprised, to hear local perspectives that don’t reflect the tone legislators from Appalachian states often take in D.C.

After listening to residents speak at the Wise County Board of Supervisors meeting about how the plan could benefit their families and share their hopes for Southwest Virginia’s economy, board member Ron Shortt told the audience, “We’re behind you 100 percent on this. We realize how important it is to Southwest Virginia and Wise County.”

The implication could be that, so far, Congress doesn’t realize how important it is for the region.

Since it holds the federal purse strings, Congress must approve funding for elements of the POWER+ Plan. But after months of opportunity to consider the proposal, and some shirking by Appalachian politicians, lawmakers in the House and Senate weakened key provisions of the plan or left them out of the budget altogether.

We recently covered Congress’s muted response in The Appalachian Voice and pointed to how lawmakers are sticking to their political sides:

… rather than receiving the POWER+ Plan with enthusiasm, many Appalachian lawmakers’ comments echoed past criticisms of the U.S. Environmental Protection Agency and claims of a war on coal.

“The administration has instituted sweeping regulations that have destroyed our economy’s very foundation without considering the real-world impacts, and funding alone won’t fix that,” a spokesperson for Sen. Shelley Moore Capito told the Charleston Gazette-Mail. Earlier this year, Capito introduced legislation to prevent the EPA from regulating carbon pollution.

When asked about the plan, a spokesperson for first-term Rep. Alex Mooney responded to the Gazette-Mail with a simple “No, Representative Mooney does not support the [POWER+] Plan.”

Mooney has introduced a bill to prevent the U.S. Department of the Interior from finalizing the Stream Protection Rule to reduce the impacts of mountaintop removal coal mining. He has called stopping the rule his “top priority.”

Rather than investing in workforce training and reemployment programs or reforming the Abandoned Mine Lands Fund to focus more on economic development, as the POWER+ Plan would, congressional opponents of the president remain primarily concerned with undermining protections for Appalachian streams and fighting limits on carbon emissions — policy goals, sure, but nothing close to an economic development plan for the region.

The counties that stand to benefit most from the plan are some of the poorest in the United States and continue to face layoffs, the impacts of ongoing mining, and pollution from decades-old and poorly reclaimed mine sites.

Lawmakers representing those counties in Congress, including Rep. Hal Rogers, who chairs the House Appropriations Committee, and Senate Majority Leader Mitch McConnell, are positioned to rally other influential legislators around the plan, but they aren’t.

Some lawmakers have made statements expressing tacit support. But the resolutions make clear that these localities expect their representatives to do more; some call on members of Congress by name to support funding for economic development in the region.

The politics surrounding the POWER+ Plan, and attempts to fit it into a “war on coal” framework, are understandably less important to Appalachian communities than advancing initiatives that will create jobs and alleviate the economic hardships they face.

Many of the communities now urging members of Congress to back the plan have been underrepresented over the years in their demands for a more diverse economy. They deserved to be heard then like they deserve to be heard now.

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U.S. coal giant Alpha Natural Resources files for bankruptcy

Friday, August 7th, 2015 - posted by jamie
Alpha Natural Resources Twilight surface mine complex in Boone County, West Virginia - Photo by Ami Vitale

Alpha Natural Resources’ Twilight surface mine complex in Boone County, W.Va. Photo by Ami Vitale, www.amivitale.com.

Alpha Natural Resources, one of the largest coal mining companies in the United States and a big player in the Appalachian coal market, filed for Chapter 11 bankruptcy on Monday of this week, coincidentally on the day President Obama announced his administration’s final Clean Power Plan.

In the announcement, Alpha blamed “an unprecedented period of distress with increased competition from natural gas, an oversupply in the global coal market, historically low prices due to weaker international and domestic economies, and increasing government regulation that has pushed electric utilities to transition away from coal-fired power plants.”

According to the release, the company does not anticipate closing the business down, but will “seek the necessary immediate relief from the Bankruptcy Court that will allow normal business operations to continue uninterrupted while in Chapter 11, with coal being mined, customer commitments honored, and wages and benefits for Alpha’s affiliated employees paid.”

A Bloomberg Business article notes that Alpha, which employs nearly 8,000 workers at more than 50 underground and surface mines and more than 20 coal preparation facilities in Virginia, Kentucky, West Virginia, Pennsylvania and Wyoming, has accumulated $3.3 billion in debt over the past several years.

The Wall Street Journal reports that Alpha has assets of $10.1 billion, liabilities of $7.1 billion, and is “seeking up to $692 million in bankruptcy financing from senior lenders and secured bondholders to fund its operations.”

United Mine Workers of America responded to the news:

“Today’s Chapter 11 bankruptcy filing by Alpha Natural Resources appears to follow the same script as others we’ve seen this year: pay off the big banks and other Wall Street investors at the expense of workers, retirees and their communities … Alpha needs to understand that while we are willing to discuss ways forward that will be of mutual benefit for the company and for our members, we are also prepared to do whatever we need to do to maintain decent jobs with the pension and health care benefits our retirees were promised and have earned.”

Alpha launched a new website to detail the Chapter 11 process, including contact information and FAQs for employees, customers, retirees and other stakeholders.

Is there an echo in here?

The move brings to mind the financial roller coaster of Patriot Coal, the West Virginia-based company that emerged from its first bankruptcy in 2012 only to file again a scant 3 years later in May of this year. Patriot’s initial 2012 “restructuring” plan was extremely controversial as it involved slashing the healthcare benefits of 1,800 union miners and retirees. Patriot initially won court approval for the cut, but, after significant public scrutiny and outrage, settled with the United Mine Workers of America in 2013 for $400 million to cover the benefits.

And now history seems to be repeating itself. According to an AP story that is quoted on Coal Tattoo (yet mysteriously disappeared from national news outlets, including the Washington Post), just a few weeks ago Patriot asked a judge’s permission to “reject the company’s collective bargaining agreement with union miners and change retirees’ health care benefits …” The United Mine Workers of America filed an objection to the proposed plan, which includes $6.4 million in bonuses paid to management employees.

Just this week, the beleaguered company announced the layoff of 1,081 coal miners, most in West Virginia’s Kanawha County.

Patriot Coal is also the first coal company in Appalachia to announce it would phase out the devastating practice of mountaintop removal coal mining.

“Big Coal’s war on itself”

When examining the financial tribulations of big coal mining companies, industry officials are quick to point the finger at what they have dubbed the “war on coal,” claiming that environmental regulations are the primary culprits causing their fiscal misfortunes. But according to a recent article co-authored by independent financial analyst Andrew Stevenson and NRDC’s Dave Hawkins, coal mining’s economic downturn has more to do with bad investment decisions than anything else.

“The biggest cause of Big Coal’s loss of value is that Big 3 management bet big on a global coal boom and lost big when it went bust,” Stevenson and Hawkins write. Their article goes on to detail the five specific reasons Alpha and other coal companies are on the brink of bankruptcy.

“In sum, bad bets at the top of the market, weak met coal prices, cheap natural gas, and lower power demand due to energy efficiency reduced cumulative forecasted coal revenues for the Big 3 by approximately $21 billion over the past four years. This is a big hit for companies as highly leveraged as Alpha Natural, Arch Coal, and Peabody Energy and the reason why these companies are struggling to stay afloat today.”

As industry officials and coal-friendly politicians — including an outspoken Mitch McConnell (R-Ky.), who notedly said, “I am not going to sit by while the White House takes aim at the lifeblood of our state’s economy” — themselves take aim at the Clean Power Plan, they have yet to acknowledge the most important question on the table: what will happen to residents in Appalachia’s coal country who, because of company bankruptcies, layoffs, revocation of pensions and lack of other job opportunities, remain among the poorest in the nation?

So far, the only offer of assistance to these folks has come from President Obama himself, in the form of the POWER+ Plan to revitalize the region.

“They’ll claim [the Clean Power Plan] is a “war on coal,” to scare up votes — even as they ignore my plan to actually invest in revitalizing coal country, and supporting health care and retirement for coal miners and their families, and retraining those workers for better-paying jobs and healthier jobs,” Obama said on Monday, taking aim at McConnell and his other critics. Communities across America have been losing coal jobs for decades. I want to work with Congress to help them, not to use them as a political football.

Community Rallies Around Need for Energy Efficiency in the High Country

Thursday, July 30th, 2015 - posted by jamie

Over 1,000 residents support greater energy efficiency investments to grow economy, lower energy costs

CONTACT:
Rory McIlmoil, Energy Policy Director, rory@appvoices.org
Sarah Kellogg, North Carolina Field Organizer, sarah@appvoices.org
(828) 262-1500

Boone, N.C. — More than thirty local residents, service organizations and local government officials gathered for an event Wednesday evening at the Jones House in Boone to raise awareness about the need for greater investments in energy efficiency in the High Country. Speakers included: Zach Dixon, Brooke Walker, Violet Scholar and Mary Ruble — local residents who need or have benefitted from home energy improvements; Sam Zimmerman of Sunny Day Homes, a local business that offers energy efficiency contracting services; and, Melissa Soto of WAMY Community Action Agency, which provides free weatherization and heating improvements for qualified low-income residents.

Appalachian Voices, a regional environmental non-profit organization promoting electric utility “on-bill energy efficiency finance” programs, organized the event with the support of local residents. On-bill financing offers residents a way to pay for energy efficiency upgrades to their homes through their electric bills using the savings gained as a result of the energy improvements. During the event, Appalachian Voices presented a folder containing more than 1,000 signatures by High Country residents and letters from more than 20 local businesses and service agencies supporting an increase in energy efficiency investments through on-bill finance programs. According to Appalachian Voices, such programs provide the best option for addressing high energy costs related to poorly weatherized homes and old, inefficient appliances, and for alleviating the impact that energy costs have on low- to moderate-income residents.

The event closed with a call for local electric utilities, government agencies, service organizations, businesses and residents to identify and invest in solutions such as on-bill financing for lowering energy costs, alleviating poverty and creating new jobs in the High Country.

“Energy waste isn’t just an environmental problem, it’s also an economic problem,” said Rory McIlmoil, energy policy director for Appalachian Voices. “Here in the High Country we see a high incidence of poverty, lower-than-average family income, a housing stock that is mostly decades old and in need of efficiency improvements, and energy costs that for some folks accounts for nearly half of their income in the winter months. Together those issues are having a negative economic impact on the area, and this is a problem that we need to work together to address.”

To illustrate the need for home energy improvements and the benefits such improvements can have on local residents, Appalachian Voices hosted the High Country Home Energy Makeover Contest, which ended last February with three residents receiving free efficiency upgrades. Zach Dixon, a resident of Boone and the grand prize winner of the contest, described the benefits he’s received, saying, “Before winning the contest and getting my attic and floors insulated, I had so much heat escaping right through the attic, and I was paying as much as $200 a month on my electricity bills. Just having that insulation has made a major difference.”

An analysis of the three winning homes was conducted by ResiSpeak — a Cary, N.C.-based utility data collection and analysis service. Daniel Kauffman, general manager of ResiSpeak, summarized the results by saying, “Based on the few months of data since the retrofits, the homes appear to be consuming between ten and thirty percent less electricity than they were before. We will have a clearer picture of the energy savings due to the retrofits after this coming winter, and if current trends continue we should see significant savings.”

In addition to the services WAMY provides, much is already being done in the region to assist families who struggle with their energy bills in the winter or are in need of home energy improvements. For instance, Blue Ridge Electric Membership Corp.’s donation-based Operation RoundUp program provides bill payment assistance for residents who are unable to pay their energy bills in the winter. Community service organizations such as WeCAN help distribute these funds, while other organizations provide free firewood for winter heating needs. Many High Country residents have taken steps to lower their own energy costs. Despite all of these efforts, the fundamental lack of financial support remains largely unaddressed, leaving thousands of residents without the means for improving their home’s energy efficiency.

Speaking at the event, WAMY’s Executive Director Melissa Soto said “WAMY can weatherize homes for individuals that fall below 200% of [the U.S. poverty line]; however, there is always a long waiting list and never enough funding. There is also a huge gap between those that qualify for our services and those that can afford to make the improvements themselves. That’s why an on-bill financing program is so exciting — it gives those in the middle income brackets an opportunity to improve their quality of life.”

To which Mary Ruble of Boone, who is also a Blue Ridge Electric member, added, “I’m one of those that falls in the gap. I’ve been able to pay for some improvements myself, but not for everything that needs to be done. To me, on-bill financing is a win for all of us, and I’m really thankful that Blue Ridge is exploring ways they can help.”

“New solutions are required that provide comprehensive energy improvements while greatly increasing the level of investment in residential energy efficiency in our communities,” concluded McIlmoil. “We’re already seeing steps being taken to achieve this with the recent announcement by Blue Ridge Electric that they are considering developing an on-bill financing program for their members. We greatly appreciate this and are extremely encouraged by their leadership in tackling the issue.”

Appalachian Voices and local residents expressed hope that the event would spark a conversation throughout the High Country about how to develop more effective programs for addressing the problem of high energy costs. More information about on-bill financing and the Energy Savings for the High Country campaign can be found at appvoices.org/highcountry.

Virginia city first to support POWER+

Wednesday, July 22nd, 2015 - posted by Adam

Welcome to Norton6

The city of Norton, in southwest Virginia, just took an important, forward-looking leadership position in the effort to diversify the region’s economy and create a healthier, more sustainable future.

Tuesday evening, the city council voted unanimously in favor of a resolution supporting the POWER+ Plan, the federal budget proposal to steer billions of dollars for economic development and diversification to Appalachia’s coal-impacted communities, including those in Virginia. It’s the first such local resolution of support in the nation for the plan, proposed earlier this year by the White House.

The city’s resolution also urges U.S. Senators Mark Warner and Tim Kaine, and Congressman Morgan Griffith (9th District, Va.) to support “any plan that targets redevelopment funding opportunities for our region.”

Please contact your Senators now to make sure they support a budget that includes a path forward for Appalachia.

Appalachian Voices championed this resolution with Norton’s leaders, and commend them for leading the way on this vital issue. We and our partners have been working throughout Central Appalachia to promote this vital opportunity, which would fund job retraining and infrastructure investments, as well as direct new funding to clean up abandoned mines.

The POWER+ Plan creates new funding and bolsters existing federal programs designed to diversify the economy in areas that have relied heavily on coal and have seen job losses as a result of the contracting coal economy in recent years.

Here’s the text of the resolution:

WHEREAS: The POWER+ Plan is a component within the 2016 federal budget proposed by President Obama; and

WHEREAS: The POWER+ Plan, if approved by Congress, would authorize billions of dollars in federal programs targeted to improve the economy of the Appalachian Coalfields, including the economies of Southwest Virginia and the City of Norton; and

WHEREAS: The Plan specifically includes increased funding for the Abandoned Mined Land Fund, Appalachian Regional Commission, and the United Mine Workers of America Health and Pension Plan; and

WHEREAS: The City of Norton desires to invest resources to adapt to new economic circumstances facing our region and the increased federal funding targeting our region that would help to leverage local efforts;

NOW, THEREFORE, LET IT BE RESOLVED THAT the City of Norton supports any initiative, such as the proposed increased funding noted above as included in POWER+ Plan, and that the City encourages Senators Kaine and Warner and Congressman Griffith to support any plan that targets redevelopment funding opportunities for our region.

Ask your senators to support the POWER+ Plan.

Ginseng’s growing role in the new Appalachian economy

Monday, July 20th, 2015 - posted by Adam
The cultivation of ginseng, a medicinal plant native to Appalachia,

The cultivation of ginseng, a medicinal plant native to Appalachia, could provide a boost for local economies.

Most people who live in or come to visit the mountains know that just being here, surrounded by lush green hills and clear, fast-flowing rivers, can have a healing effect on the soul.

But not as many people know that many of the plants that make the mountains’ forest floor so lush and green have real medicinal properties and, when used properly, can help treat ailments ranging from sore throats to cancer.

Growing and marketing those wild medicinal plants and herbs was the subject of a recent workshop offered by the group Appalachian Communities Encouraging Economic Diversification (AppalCEED) in Norton, Va. Based in the heart of Virginia’s coal country, AppalCEED works to promote sustainable ways to diversify the local economy. The workshop focused on helping local landowners, farmers and gardeners gain the information they need to break into this innovative and sustainable market.

Turnout to the workshop was a testament to the possibilities and enthusiasm for new ideas to boost local economies. The room was overflowing with interested people who came from as far away as Williamson, W.Va. — an hour-and-a-half drive.

Part of the draw was the expert panel that AppalCEED assembled for the workshop, which included three experts on the cultivation of wild and medicinal plants and herbs. Scott Persons, Jeanine Davis and David Grimsley are each highly regarded as “gurus” in their niche field of study, and each gave detailed presentations on their respective areas of expertise. Persons and Davis have co-authored a book together that is held as The authoritative text on growing and marketing the plants.

Another big draw is the fact that wild ginseng, perhaps the best known of Appalachian wild medicinal plants, fetches anywhere from $700 to $1,200 per dried pound. While it’s possible to cultivate ginseng on a commercial scale in large fields, the resulting crop is deemed to be of lower quality than its wild-grown counterparts.

Persons has spent his career developing a technique known as “wild simulated” cultivation, where ginseng plants are deliberately planted in small patches in woodlands. This allows for resources and energy to be concentrated, streamlining the process. He’s also developed techniques that can produce a product identical to that of ginseng that would pop up naturally in the wild.

While Scott’s presentation was exclusively on ginseng, Davis and Grimsley focused their talks on other plants, such as goldenseal, black cohosh and even some medicinal plants native to China. All three presenters stress how cultivating these plants in our woodlots and gardens can help to preserve threatened wild stock from being over harvested.

They also discussed strategies for cultivators to supplement their income through strategic marketing. Grimsley in particular is working to develop co-op-like arrangements among consortiums of growers in Floyd County, Va., to reduce production costs and increase collective selling power.

At the end of the day, we’re still talking about farming, even if it’s on a small scale. And while farming these plants won’t make anyone a millionaire overnight, the extra income can certainly help. Anything helps these days.

The coal bust has created some harsh economic realities here in Central Appalachia. The implications of our reliance on one major industry for a century are finally becoming unmistakably clear. No one industry or sector can or should replace coal as it fades into history. We could do well to take a lesson from Appalachia’s forests: there’s strength and healing in diversity.

Virginians’ electric bills could shrink under Clean Power Plan

Monday, July 20th, 2015 - posted by hannah
Appalachian Voices' members deliver a petition supporting a strong Clean Power Plan to the office of Virginia Governor Terry McAuliffe.

Appalachian Voices’ members deliver a petition supporting a strong Clean Power Plan to the office of Virginia Governor Terry McAuliffe. A new report from Public Citizen underscores the economic benefits of investing in energy efficiency to comply with the plan.

A new report from Public Citizen’s Climate Program details how the EPA’s soon-to-be finalized standards on carbon pollution could lower Virginians’ power bills.

The strategy for achieving this benefit is simple: invest in cost-effective energy efficiency programs first.

You may be wondering why yet another document is necessary to make the obvious case for improving energy efficiency. After all, Virginia already has a state goal of reducing retail electricity 10 percent by 2020.

But Public Citizen’s report is so important now — just a few weeks ahead of the final Clean Power Plan’s release — because the EPA’s detractors continue to argue that the plan will be very costly for Virginians.

Ever since the EPA announced the proposal last summer, misconceptions and red herring arguments have circulated, some stranger and more exaggerated than others. At a committee meeting in Richmond, for example, an opponent of the plan made the mind-boggling claim that more premature deaths will potentially result from the standards than would be prevented.

Beyond baseless arguments about negative health impacts, opponents of the Clean Power Plan weave a tangled web when they attack the standards on the basis of rising energy costs.

As the report points out, rates are not what consumer advocates should be most concerned with in this case. Customers’ utility costs are determined by the price they pay per megawatt hour and their usage. According to the report, Virginians can expect to see electricity bills go down on average about $147 annually.

Before anyone decides how to spend that extra $147, note that that figure is likely conservative, and monthly savings for customers may be greater for a couple of reasons. First, that number was arrived at using the EPA’s estimates of what it costs to run programs that save energy, and the EPA indicates that those estimates are 60 to 100 percent higher than they should be given more recent studies that show energy efficiency can be done for much less.

Second, it doesn’t consider the cost of energy efficiency gains coming down as economies of scale are reached, treating efficiency instead as a tree from which fruit gets harder to collect once the low-hanging ones are already picked. So it is quite possible that customers will save much more through participating in efficiency programs, eliminating the need or desire by utilities to construct new natural gas and nuclear facilities.

An introductory summary as well as the full Public Citizen report are online. This Media Matters piece from last year breaks down the myths and the facts about the Clean Power Plan, which will be finalized next month.

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Eliminating poverty housing with efficient and alternative energy use

Tuesday, July 14th, 2015 - posted by eliza
A group of volunteers for Ashe County Habitat for Humanity lays a timber frame on their first house, which was built with energy efficiency and alternative energy to lessen the burden of utility bills on people living in poverty.

A group of volunteers for Ashe County Habitat for Humanity lays a timber frame on their first house, which was built with energy efficiency and alternative energy to lessen the burden of utility bills on people living in poverty. Photo by Gerry Tygielski.

When North Carolina’s Ashe County Habitat for Humanity formed five years ago, seven people, some who live off the grid, came together to study how to best build a home.

They made a commitment not only to affordability, but also to energy savings, and the board voted to build all Ashe County Habitat houses to maximize efficiency and place an emphasis on alternative energy.

“The benefits of energy efficiency fell into the basic requirements of the Habitat ministry,” says Gerry Tygielski, construction chairman for Ashe County Habitat for Humanity, which is founded on a “focus to eliminate poverty housing.”

To get a Habitat house, one must have an inherent need, be fiscally responsible, take part in the building process and take courses on house maintenance. The motive of Ashe County Habitat is to not only lower the cost of the mortgage, but also the cost of living in the house. Almost one in seven families in Ashe County live below the poverty line, according to the most recent census data.

“This past winter, we heard of some people having heating bills of $500 a month,” Tygielski says. “When you’re renting for another $500, that can bankrupt some people.”

The first Ashe Habitat house is a net-zero building, meaning that the energy produced by alternative energy on the house is equal to the energy used in the house. The average cost of heating and powering the house is $50 each month, says Tygielski. The second Ashe County Habitat house is currently underway and will be near, but not quite, zero net energy, due to budget constraints, but Tygielski says that they will be close since the price of solar has gone down.

The house is built with insulated concrete form, a novel construction material that uses what we commonly know as styrofoam, and has a higher insulation and fire rating than conventionally built homes with timber, insulation and drywall. It eliminates air leaks, which, on average, amounts to the air that escapes through an open window, according to the U.S. Department of Energy. Insulated concrete foam is not widely used, but it is becoming more popular for constructing basements.

A group of volunteers for Ashe County Habitat for Humanity set foam blocks into place. Concrete will be poured over the blocks to create an airtight wall.

A group of volunteers for Ashe County Habitat for Humanity set foam blocks into place. Concrete will be poured over the blocks to create an airtight wall. Photo by Gerry Tygielski.

High-quality storm windows also reduce air leakage, a metal roof reduces the amount of energy absorbed in the attic and solar panels provide a renewable energy source. But arguably the most efficient aspect of the house is the heating system, a geothermal heat pump. A six-foot trench, a pond or a well accesses the water table at Earth’s year-round internal temperature of 55 degrees. A compressor extracts heat from the water to heat air and pump it into the house. A conventional heat pump extracts heat from the air outdoors down to five degrees.

In northwestern North Carolina’s High Country, harsh winters are commonplace and days with temperatures below five degrees are increasing.

Conventional electric heat pumps are three times more efficient than a gas or oil furnace, Tygielski says. A geothermal heat pump is three times more efficient than an electric pump, reducing a $300-400 heating bill to $100.

“There is a premium you pay for having that opportunity, but it pays for itself so quickly that it’s a good investment,” he says. Their initial estimate says that the extra costs of making the first Ashe County Habitat house will be paid back in 10 years through lower utility bills, mainly due to greatly reduced heating costs.

This concept has a similar ring to on-bill financing, a utility-led program that provides loans for energy efficiency upgrades. The repayments, made on a homeowner’s utility bill, are structured so that they are equal to or less than the amount of energy savings resulting from the upgrades.

John Parker, an electrician who founded Parker Electric, donated his time to install solar panels on both Ashe County Habitat for Humanity's houses.

John Parker, an electrician who founded Parker Electric, donated his time to install solar panels on both Ashe County Habitat for Humanity’s houses. Photo by Gerry Tygielski.

Tygielski recognizes that there is a lack of public understanding about the basics of energy efficiency and that something can be done about high heating bills. Not to mention “people are busy working themselves to death to pay the bills,” he says. “They’re not in the position to be investing in home improvements.” He says an on-bill financing program gives people a chance to do something they probably would never be able to do otherwise.

In the last two years at least six people in Ashe County have been referred to Tygielski that cannot afford their utility bills. His response is to direct them to a Habitat for Humanity house application. Within a year, he may also be able to direct people to apply for an on-bill finance program offered by Blue Ridge Electric Membership Corp, an electric co-op that serves the High Country.

The electric cooperative is currently looking into on-bill finance program designs. If you are a member, please sign our letter of support to Blue Ridge Electric!

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Turning down the heat: A collaborative effort to reduce energy bills

Friday, July 10th, 2015 - posted by rory

This piece was co-authored by Jen Weiss, a senior finance analyst at the Environmental Finance Center at the University of North Carolina-Chapel Hill.

The North Carolina On-Bill Working Group seeks to facilitate the development of programs that educate homeowners about energy efficiency and put financing easily within reach for all income levels.

The North Carolina On-Bill Working Group seeks to facilitate the development of programs that educate homeowners about energy efficiency and put financing easily within reach for all income levels.

There’s no doubt about it. June was HOT.

While extreme temperatures can make outdoor activities unbearable, they can also send electric utility bills skyrocketing across most of North Carolina and place high demands on the state’s electric utility infrastructure.

As heating and cooling equipment are pushed to the max, the demands are made even more significant due to inefficiently insulated and poorly weatherized houses that lose cool air as quickly as it is generated. But the cost to weatherize a home can make energy efficiency improvements unaffordable — particularly for homeowners who are already burdened with basic housing costs that can outweigh their limited income.

With the aim of providing these homeowners with a solution that will reduce their energy bills and improve home comfort, a collaborative working group was recently been formed by leading energy advisors in the Southeast. Working with multiple stakeholders across the state, the North Carolina On-Bill Working Group seeks to facilitate the development of programs that educate homeowners about energy efficiency and put financing within reach for all income levels.

The Challenge: High Energy Costs

High energy costs can be particularly challenging for lower income Americans. According to the U.S. Energy Information Administration, the average North Carolinian spends $3,714 annually on energy costs. With a median household income of $46,334, this equates to 8 percent of the average residents’ annual income. This is nearly three times the national average of 2.7 percent in 2012. In rural communities where median household income tends to be much lower, averaging $22,000, energy expenditures as a percentage of household income can be as much as 17 percent or higher.

This situation is only going to get worse as it is predicted that energy costs will continue to rise in coming years. Energy efficiency improvements for North Carolinians can alleviate the impact of current and future energy costs. Unfortunately, many homeowners cannot afford the upfront cost to weatherize their properties or purchase energy-efficient appliances that will reduce their energy bills. North Carolina residents of all income levels need access to streamlined and simple energy efficiency finance programs that can help make energy more affordable.

A Solution: Utility On-Bill Programs for Energy Efficiency Financing

Fortunately, proven models exist that expand access to financing for energy efficiency improvements for everyone, including people who may not qualify for loans under traditional underwriting criteria. Known as “on-bill” programs, these financing models provide a mechanism whereby the upfront cost of energy saving improvements and equipment is funded by the electric utility or a third-party financier, and ratepayers are able to pay down the cost through a monthly payment on their electric bill.

Depending on the structure of these programs and the initial source of capital used to finance the program, on-bill programs offer a number advantages to participants, particularly low-income consumers. Advantages include performance-based repayment schedules that align the monthly payback with projected savings achieved, creating a net savings for the consumer. In other words, even with the new charge added to their electric bill, the customer will still pay less on an annual basis than they would have without the improvements. Additionally, on-bill programs can be structured so that they are available to renters and businesses.

Partners in Efficiency: North Carolina’s Rural Electric Member Cooperatives

Together, North Carolina’s 26 electric member cooperatives (co-ops) serve roughly 937,000 members, provide electric service to rural areas in 93 of the state’s 100 counties, and account for 23.7 percent of total electric sales in the state. Many of the state’s electric co-ops and municipal utilities serve communities characterized by ratepayers with lower than average median household incomes and limited access to low-cost financing.

A 2014 study of census data found that these utilities serve the highest concentrations of low-income communities across the Southeast, making co-ops and municipal utilities key stakeholders and powerful allies in addressing this issue. Dedicated to improving the lives and communities of those they serve, many co-ops have developed or are exploring energy efficiency finance programs. It is the goal of the North Carolina On-Bill Working Group to support all of North Carolina’s electric co-ops who are interested in developing an on-bill program for their own members.

Benefits to North Carolina Residents

  • Expanded access to capital for ratepayers at all income levels including homeowners, renters and businesses.
  • Performance-based repayment schedules that align the monthly payback with energy savings.
  • Low- to no-cost opportunity to improve energy performance and home comfort.

Benefits to North Carolina Utilities

  • Reduced complaints from customer regarding high bills and problems paying electric bills.
  • Enhanced customer satisfaction.
  • Reduced need to build new generation facilities by reducing peak demand.
  • Helps to achieve energy efficiency and/or renewable energy goals

About the North Carolina On-Bill Finance Working Group

The North Carolina On-Bill Finance Working Group — a partnership of Appalachian Voices, the Environmental Defense Fund, the Environmental Finance Center at UNC-Chapel Hill, and the Southeast Energy Efficiency Alliance — has been formed to work with North Carolina co-ops and other community stakeholders to provide the education and support resources needed to establish on-bill programs and expand access to energy efficiency programs for residents across the state.

As the Working Group ramps up its efforts, we will be reaching out to electric co-ops, community partners and other stakeholders to identify the needs and challenges faced by co-ops, and to work toward solutions that facilitate the development of new on-bill programs throughout North Carolina. If you are interested in learning more about the North Carolina On-Bill Working Group or supporting our efforts, send an email to NCOnBill@seealliance.org.

A time of transition: APCo’s latest Virginia generation plan

Monday, July 6th, 2015 - posted by hannah
Photo courtesy of Community Housing Partners / Solarize Blacksburg.

Customer involvement is essential as Appalachian Power navigates permitting and rate-setting for future clean energy projects in Virginia. Photo courtesy of Community Housing Partners / Solarize Blacksburg.

It’s like Christmas in July — for those of us who get excited about energy news, at least.

Last week, Virginia’s utilities released their long-term plans to meet electric demand. Here we unwrap that bright and shiny package and take a look at what mix of resources Appalachian Power Co. plans to pursue between now and 2029.

What would you expect APCo to include in its plan? It wouldn’t be a surprise to see huge investments in solar and wind; after all, clean power is growing rapidly in the commonwealth. For example, in the first three months of 2015, clean energy jobs picked up rapidly to the point that Virginia was ranked seventh in the country, counting biofuels and other clean transportation projects. Solarize initiatives and institutions are further fanning these flames, and this fire now appears to be reaching the utility level, too. With utility participation in this trend, there is a chance to realize serious health, economic and employment benefits.

And there is another important consideration in Virginia. Last year, the State Corporation Commission, which regulates Virginia electric utilities, directed APCo to look at ways to meet national carbon pollution reduction goals.

Now that APCo’s latest long-term plan is out, we have a window into how the company hopes to meet future demand. We can now ask how these options promote healthier communities, lower overall energy bills and create more sustainable clean energy jobs in the company’s service area, which includes much of western Virginia. And we can see how its plan interacts with new pollution standards.

Here are five points to help illuminate the plan: its purpose, the mix of sources, how energy efficiency is treated, the role of fossil fuels, and the scale of renewables.

1. APCo calls its primary option the “hybrid” plan. According to the plan summary: “While not the least-cost plan, the Hybrid Plan, when compared to other portfolios, attempts to balance cost, the potential risk of a volatile energy market.” That last phrase can help defend the options based on the fluctuations in natural gas prices and may refer to regulations, too.

2. Wind, solar and efficiency resources currently total just 1 percent of APCo’s total capacity (in megawatts). Today, coal represents 72 percent of APCo’s generation portfolio. Natural gas represents 14 percent. By 2029, wind, solar and efficiency will come to 22 percent under this approach, coal will fall to 52 percent and natural gas will grow to 23 percent.

3. But let’s look at energy efficiency. Currently, there are no APCo efficiency programs underway in Virginia. There is, however, a set of “demand-side management” programs that the commission approved to begin later this year. And the company does fund low-income weatherization. Still, its Hybrid Plan largely ignores the opportunity to expand energy efficiency, which under the plan accounts for just 1 percent of energy needs by 2029. The state goal endorsed by Governor Terry McAuliffe is 10 percent savings by 2020. Only by developing much more robust energy efficiency programs can APCo significantly invest in reducing customer bills, help create jobs in home energy assessment and retrofitting, and avoid the need to develop costlier sources.

4. Clinch River Power Plant units 1 and 2 are still on schedule to be converted to natural gas now and then retired before 2026, and unit 3 is close to being retired. Glen Lyn is now also retired. While the Hybrid Plan describes pursuing constructing 836 megawatts of combined-cycle natural gas units, it appears the company plans to build those plants out of state, limiting the growth of carbon emissions in Virginia, but leading to an increase in the carbon footprint of APCo’s Virginia customers.

5. Clean energy investments would grow significantly under APCo’s plan. Utility-scale solar will include a 10-megawatt project in 2016, with future projects bringing the total to 510 megawatts of solar by 2029. Onshore wind will include 150 megawatts of projects in 2016, with future projects bringing the total to 1,350 megawatts of wind by 2029. APCo assumes its customers will add a total of 25 megawatts of distributed solar generation (rooftop panels) by 2029. Since APCo is factoring that distributed solar into its plans, it should assist customers with incentives to go solar and begin to fairly value those customers’ contributions to a more secure and cleaner energy system.

While APCo representatives stress that the resource plan document is merely a snapshot in time and subject to changes and evolution, it’s worth engaging with the utility about what this plan says about its priorities.

Since APCo’s choices figure into Virginia’s ultimate compliance with the Clean Power Plan, it’s critical that the utility consider how to maximize benefits for customers as it works to meet emissions targets. Over the next 15 years, APCo must plan to reduce its total annual carbon pollution, not just slow its growth. The goals for greenhouse gas reductions are within reach, and our energy choices send signals that echo louder than ever across the Southeast.

As APCo navigates permitting and rate-setting processes for its vision of future clean energy projects, customer involvement will be essential. We’ll need to be ready to challenge any and all barriers to smart renewable energy investments that diversify local energy sources, create jobs in the clean energy sector and result in healthier air in APCo’s service region.