Posts Tagged ‘Economy’

“Clean coal” is on the fritz

Wednesday, February 18th, 2015 - posted by brian

By Brian Sewell

Cost overruns and construction delays are dampening enthusiasm for carbon capture and storage technologies

A rendering of FutureGen 2.0. Earlier this month, the U.S. Department of Energy pulled its funding from the project, which was intended to demonstrate the feasibility of carbon capture and storage technology on a commercial-scale. Credit Department of Energy.

A rendering of FutureGen 2.0. Earlier this month, the U.S. Department of Energy pulled its funding from the project, which was intended to demonstrate the feasibility of carbon capture and storage technology on a commercial-scale. Credit Department of Energy.

As one of the most high-profile and hyped-up projects of its kind, the FutureGen “clean coal” plant in Illinois was supposed make history. Its backers saw in it the key to unlocking an inherently dirty energy source’s promise in a world coming to grips with climate change.

So the announcement earlier this month that the U.S. Department of Energy is backing out of its $1.1 billion funding commitment to the FutureGen project, citing a desire to “protect taxpayer interests,” sent a shockwave through the coal sector and investors, energy analysts and environmentalists all took note.

But the news that “clean coal” technology has taken yet another hit should not come as a surprise. Even with $6 billion in commitments under the Obama administration, carbon capture projects just don’t have the track record needed to pique private investors’ interest.

Every form of carbon capture technology comes with technical and technological drawbacks that translate to enormous costs. A commercial-scale “clean coal” plant using even the most advanced technologies may increase the cost of electricity by up to 80 percent, according to DOE. These challenges make commercial-scale carbon capture projects outcasts when it comes to competitive energy markets, where traditional fossil fuel plants and, increasingly, large-scale and distributed renewable projects represent the most cost-effective power sources.

Convinced that coal will remain one of the nation’s foremost energy sources for decades to come, DOE will put billions more into advancing “clean coal” technology, attempting to overcome its economic pitfalls and keep burning the dirtiest fuel around.

FutureGen’s Downfall

FutureGen 2.0 planned to transport CO2 waste approximately 30 miles  through pipelines before being injected in deep saline formations.

FutureGen 2.0 planned to transport CO2 waste approximately 30 miles through pipelines before being injected in deep saline formations. Click to enlarge.

The idea for FutureGen arose in 2003 under the Bush administration. The plan was for the FutureGen Industrial Alliance, a coalition of mining and energy companies including Alpha Natural Resources and Peabody Energy, to oversee retrofits to an existing coal plant and, in the process, prove the feasibility of burning coal, then capturing and storing the carbon emitted underground.

But the project soon began suffering from the delays, cost overruns and other challenges that will be its legacy. FutureGen was canceled, for the first time, in 2008 before construction could begin.

In 2010, the Obama administration used stimulus money to give FutureGen new life as FutureGen 2.0, a smaller proposed plant that would use a different technology to capture its emissions, but still show how carbon capture could make a more climate-friendly coal plant. For a time, everything seemed to be going in FutureGen’s favor. But then familiar cracks started to appear.

The Illinois Commerce Commission approved a controversial plan in 2012 to require utilities, and therefore their customers, to buy all the electricity generated by the FutureGen plant for 20 years — likely at dramatically over-market rates. The decision may have reassured some private investors, but challenges to the decision by the utilities themselves were headed to the Illinois Supreme Court.

The Sierra Club challenged the air pollution permit granted to FutureGen by the Illinois Pollution Control Board, saying the State of Illinois should hold FutureGen to its promise to build a “near-zero emissions” plant. FutureGen needed to convert a World War II-era boiler at the plant to one compatible with the oxy-combustion technology it planned use to capture its emissions. The Sierra Club argued that allowing FutureGen to convert the boiler would violate the federal Clean Air Act unless it obtained the appropriate permit from the U.S. Environmental Protection Agency.

All of this is to say that the DOE isn’t entirely, or even mostly, responsible for FutureGen’s failure. Unresolved legal battles, environmental and economic concerns all combined to hurt the chances of attracting enough private investment to bring the $1.65 billion project online. It became clear that the project could not be completed by September 2015, the deadline for federal funds to be spent under the 2009 stimulus, so DOE pulled the plug.

According to DOE, approximately $116.5 million of the total award had been invested in the plant since 2010.

The Sierra Club, which has called FutureGen a boondoggle from the very beginning, said the news reflects a national trend toward embracing clean energy.

“This project has gone through a decade of false starts and with today’s announcement, $1 billion in federal funding and hundreds of thousands of dollars in Illinois ratepayer financing can be freed up for investment in clean energy,” Holly Bender, Deputy Director of the Sierra Club Beyond Coal campaign, said in a statement.

Coal industry groups directed their frustrations toward the Obama administration and mostly overlooked the host of other challenges facing FutureGen.

Hal Quinn, president of the National Mining Association, said in a statement that DOE’s decision to end funding for FutureGen “cannot be reconciled with the [Obama] administration’s proposal to require CCS as the only acceptable technology for any new coal-fueled power plant in the U.S.”

Proceed with Caution

A "first-of-its-kind" technologically speaking and the most expensive coal plant of all time, Mississippi Power's Kemper Plant has put ratepayers at risk in search of unproven and far-off returns. Photo from Wikipedia.

A “first-of-its-kind” technologically speaking and the most expensive coal plant of all time, Mississippi Power’s Kemper Plant has put ratepayers at risk in pursuit of unproven and far-off returns. Photo from Wikipedia.

Carbon capture is a must if future U.S. coal plants — if there is such a thing — hope to meet regulations on greenhouse gases being developed under the Clean Air Act.

Analysts say the only way to create a market for carbon capture technology, at least one that would attract significant private capital, is by capping power plant pollution. But groups like the National Mining Association lambast the president and the U.S Environmental Protection Agency for pursuing policies that will limit carbon pollution from power plants and steer investments toward alternative forms of energy, including “clean coal.”

Even with a strong climate policy, some experts doubt commercial-scale “clean coal” projects will be around in time to make a meaningful contribution to reducing carbon pollution. Sean Casten, the president and CEO of Recycled Energy Development, recently drew the comparison between the likelihood of the technology’s success and the existence of unicorns.

“I suppose it’s possible that there will suddenly be a huge pot of capital willing to invest billions of dollars in an unproven technology with long construction times and regulatory-dependent cash flows,” Casten told SNL Energy. “But unicorns are more likely.”

Another notable casualty is Tenaska’s $3.5-billion Taylorsville, Ill., plant, which the Nebraska-based energy developer canceled in 2013. The company cited market conditions that led it to focus on developing natural gas and renewable energy facilities instead. But the fact that Illinois lawmakers would not agree to a 30-year contract to buy electricity from the plant, and pass those high costs on to ratepayers, had something to do with it.

With the Taylorsville plant and FutureGen off the table, the U.S. is left with one utility-scale carbon capture project currently under construction. But Mississippi Power’s Kemper Plant, which received a $270 million grant from DOE, is like the projects before it: more of a cautionary tale than a positive sign for coal’s future.

Cost increases have been like clockwork at Kemper. Initially estimated to cost $2.2 billion, the price to build the plant has ballooned to $6.17 billion since 2009, making it the most expensive coal plant in U.S. history. Southern Company, the parent company of Mississippi Power, announced a $45 million increase this month.

$6 billion and counting: Cost increases at the Kemper Plant have been like clockwork since 2009.

$6 billion and counting: Cost increases at the Kemper Plant have been like clockwork since 2009. Graphic by the Institute for Energy Economics and Financial Analysis.

To help pay the bill, the Mississippi Public Utilities Commission approved an 18 percent rate hike on Mississippi Power in March 2013, and the company says it’s likely to seek another increase of at least 4 percent to help pay off $1 billion in bonds that the state legislature is allowing it to issue.

“This is the largest rate increase in the state of Mississippi’s history, and this is the largest transfer of wealth from the people to a corporation in the state of Mississippi’s history,” Public Service Commissioner Brandon Presley told Mississippi Watchdog in 2013.

Presley was the only dissenting vote when the commission approved the rate increase. But now the state’s highest court is on his side. Last week, the Mississippi Supreme Court reversed the rate increase after finding the utilities commission hadn’t ruled on the “prudency” of the Kemper Plant’s growing cost. The court directed Mississippi Power to refund ratepayers about $271 million attributed to the rate increase.

The Kemper plant is slated to open in mid-2016, more than two years behind schedule.

The quest to create a cleaner future for coal increasingly rests on the question of how much we’re willing pay for it.

The Kentucky Creative Industry Report

Tuesday, February 17th, 2015 - posted by Dac Collins

By Dac Collins

Arts advocates were thrilled when the Kentucky Arts Council released the Kentucky Creative Industry Report this winter, the first report of its kind to fully acknowledge the contribution of the creative industry to the state’s economy.

The creative industry accounts for $1.9 billion in annual state revenue and approximately 2.5 percent of all employment in the state, providing about 60,000 jobs. That is roughly equivalent to the amount of jobs created by the information technology and communications industry and it is significantly more than the estimated 12,000 workers directly employed by Kentucky’s coal mining industry.

This 2.5 percent includes traditional artists, such as painters, musicians and writers, as well as non-traditional artists, such as web designers, advertisers and architects.

Bob Stewart, secretary of the state Tourism, Arts & Heritage Cabinet, says the report finally gives supporters of the arts “the data we need to prove the arts’ significance economically.”

Obama budget creates opportunities for Appalachian communities

Tuesday, February 3rd, 2015 - posted by brian
The Obama administration's budget includes several proposals that would create economic opportunities in central Appalachian communities struggling to weather coal's decline.

The Obama administration’s budget includes several proposals that would create economic opportunities in central Appalachian communities struggling to weather coal’s decline.

Central Appalachian communities weathering coal’s long decline would see a boost in funding under the White House budget released on Monday.

The Obama administration’s 2016 budget calls for hundreds of millions of dollars in federal funds to be spent cleaning up abandoned strip mines, and to support economic development and workforce training in mining communities facing massive layoffs as coal is increasingly outcompeted in America’s energy mix. More than 13,000 coal jobs have been lost in central Appalachia since 2011.

One of the most significant proposals included in the budget is for an additional $200 million per year over the next five years for the federal Abandoned Mine Lands program to restore dangerous unreclaimed mines. According to the U.S. Office of Surface Mining Reclamation and Enforcement, which administers the program, additional funds would assist communities most severely impacted by coal “in a manner that facilitates economic revitalization on reclaimed lands and restored waterways.”

The program is funded through a combination of a per-ton tax on coal production and discretionary spending, but has consistently fallen short of its goals. More than $3 billion worth of high-priority sites remain unreclaimed — most of which are in central Appalachia. The Kentucky Division of Abandoned Mine Lands, for instance, lists $445 million worth of unfunded projects. Groups working in the region have called on the administration to reimagine the way funds are distributed through the program by coupling workforce development and environmental restoration.

Other funding increases called for in the president’s budget include $20 million for the Labor Department’s Dislocated Workers program to provide employment services and job training specifically for laid-off coal miners and power plant employees to help them transition to jobs in other fields. The Appalachian Regional Commission would see its $70 million budget grow by roughly one-third, with $25 million in new funding directed to communities “most impacted by coal economic transition” to support a range of economic development initiatives.

The need for job creation and economic diversification in Appalachia could not be clearer. As Congress debates the president’s budget and puts forward its own proposals in the coming months, we hope they will carefully consider ways to build a truly sustainable economy in the region.

A statement from Appalachian Voices Legislative Associate Thom Kay:

There’s a great deal the president must do to help build a robust clean energy economy and ensure that disproportionately impacted areas like Appalachia are not left behind. The Obama administration’s proposed budget shows that the White House understands the need for economic diversification in Appalachia. It shows that the calls of Appalachian communities for new opportunities have been heard.

Proposals are not actions, however, and the proposed budget may never become law. The good news is that not every action to diversify the Appalachian economy requires changes to the federal budget. We will continue to use every tool available to urge the White House to commit to turning the proposals in this budget into realities, regardless of the actions of Congress.

Our Energy Savings campaign is heating up in the High Country

Thursday, January 29th, 2015 - posted by rory

Home Energy Contest Demonstrates Strong Need for Energy Efficiency Finance Options

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When Appalachian Voices asked Blue Ridge Electric Membership Corp. (BRE) to help alleviate poverty and support economic development in the North Carolina High Country by developing an on-bill energy efficiency finance program, BRE said, surprisingly, that they weren’t sure that was something that enough members would sign up for.

They offered this response despite the fact that, at the time, we had presented them with seventy letters from BRE members requesting an on-bill finance option (in addition to more than 100 signatures on a petition requesting the same thing).

We decided we would go one step further in demonstrating that demand, so back in October we launched our High Country Home Energy Makeover Contest. Through the contest we solicited enough in donations and sponsorships to be able to pay for upgrading the homes of three BRE members, and we are now able to provide a voice to and tell the stories of members who need help paying for home efficiency upgrades.

The contest turned out to be a huge success, and we announced the three contest winners last Thursday. The home improvements for the three winners will be tailored to their needs based on comprehensive energy audits that were completed over the last week. The work will primarily include insulation and weatherization — two common problems that lead to high energy bills, especially during the winter months — and will be performed by one or more of the five local businesses that sponsored or supported the contest. Those businesses include Blue Ridge Energy Works, LLC, High Country Energy Solutions, Inc., HomEfficient, reNew Home, Inc. and Sunny Day Homes, Inc.

Once the improvements have been performed, in partnership with ResiSpeak, we will monitor and report on the savings generated for each of the winners, thereby demonstrating the impact that even basic efficiency improvements can have in terms of reducing energy bills and improving the quality of life for High Country residents.

Overall, nearly 70 BRE members entered the contest. Key information about household income, energy use and expenses, and basic information about the applicants’ homes was provided. Based on the submitted information, we found that the average applicant spent more than 8 percent of his or her annual income on energy bills over the last year — nearly three times the national average of 2.7 percent. More than a quarter of applicants spent 15 percent or more of their income on energy bills. Such costs are especially burdensome given the average poverty rate of 23 percent in the BRE region.

Now to present the winners! We are so honored to know these folks, and we are even happier to be able to help improve their homes and reduce their energy bills. None of the winners or the other applicants are necessarily impoverished. They are hard-working individuals like Zack Dixon that are having a hard time finding a job. They are parents like Sean Dunlap who lives with his two young children in his dream home, but a home that lacks sufficient insulation or air sealing. And they are a retired couple living on a fixed income, like Vance Woodie and his wife. None of these folks have access to sufficient funds to make the comprehensive energy efficiency improvements needed in their homes. And, beyond the contest, each of our winners could still benefit substantially from an on-bill energy efficiency finance program through BRE, as could thousands of other BRE members that still need help.

Grand Prize Winner: Zack Dixon

Zachary Dixon, left, pictured with Appalachian Voices Energy Policy Director Rory McIlmoil.

Zachary Dixon, left, pictured with Appalachian Voices Energy Policy Director Rory McIlmoil.

Zack, a resident of Boone, N.C., heats his house with space heaters, and chronically struggles to pay his electricity bills. Over the last year, Zack spent 11 percent of his income on electricity bills. His power has been cut off by BRE twice this winter when he overdrew his pre-paid account, after which BRE assisted Mr. Dixon with a bill payment from its Operation Round Up program.

While such financial assistance helps many residents keep their homes heated in the winter, it fails to resolve the underlying problems of older or poorly built, drafty houses. For Zack, running the space heaters throughout the day is costly, and doesn’t sufficiently warm his house because of poor insulation in the attic and floors.

“I just don’t want to be freezing anymore,” he said. “There’s been times when I don’t want to get out of bed and be in the cold. It’s been a real big pain, but if I could at least quit stressing about the bills, I’d be happy.” He added, “the most important thing, that I never realized, is how much heat I’ve been losing.”

Zack’s prize will cover insulation for the floors and attic, as well as air sealing throughout the house to lock in heat and reduce his electricity use.

Runner-up: Vance Woodie

Thelma and Vance Woodie with Chuck Perry, program director for North Carolina Energy Efficiency Alliance.

Thelma and Vance Woodie with Chuck Perry, program director for North Carolina Energy Efficiency Alliance.

Vance and his wife Thelma have worked hard to modernize their turn-of-the-century home in Sugar Grove, N.C. Once heated by a coal stoker furnace, their house is now heated by an oil furnace, but the old ducts have not been replaced and so they draw cold air from the basement, which also causes problems with air quality in their home.

“I guess that’s why the dust still comes thick in the house,” Vance said. The elderly couple shuts off part of their house in the winter to reduce heating costs, but they still spend 16 percent of their income on energy bills. Responding to winning the contest, Vance said: “We needed something, some kind of help, so we took a chance.”

Runner-up: Sean Dunlap

Sean Dunlap of Sugar Grove, N.C.

Sean Dunlap of Sugar Grove, N.C.

Sean lives with his wife and two children in a 1938 farm house built by his wife’s great-grandfather, making their children the fifth generation to live there. Despite making what energy efficiency improvements they could, there is still a lot to do. Their prize money will cover adding insulation and weatherization the lack of which places their plumbing at risk and results in a cold home in the winter. “We are so excited to find out that we won,” said Mr. Dunlap. “Now our work with Appalachian Voices will continue as we upgrade our house. Their professionalism and expertise has already made a huge difference and now we are able to look forward to making our home more efficient, comfortable and livable for our family.”

The contest was sponsored by the local businesses listed above as well as the Blumenthal Foundation and LifeStore Insurance. The North Carolina Energy Efficiency Alliance provided home walk-through assessments and energy audits. Appalachian Voices extends our deepest gratitude to each of the businesses and organizations for their support.

If you are a BRE member and would like to show your support for BRE developing an on-bill energy efficiency finance program that could help folks like Zack, Vance and Sean, or are in need of such support yourself, join the Energy Savings for the High Country campaign and sign the petition!

Energy efficiency at the forefront of cooperative principles in Tennessee

Wednesday, September 17th, 2014 - posted by rory
Frank Rapley, General Manager of TVA's Energy Efficiency Programs, presents on the new EE programs that TVA will be offering in 2015. Photo credit: Tennessee Electric Cooperative Association.

Frank Rapley, General Manager of TVA’s Energy Efficiency Programs, presents on the new EE programs that TVA will be offering in 2015. Photo credit: Tennessee Electric Cooperative Association.

Rural electric cooperatives, which serve millions of families across Appalachia, operate on seven principles, the most important of which (at least to us) is principle number seven: “Concern for Community.”

The seventh principle commits electric co-ops to “the sustainable development of their communities through policies accepted by their members.” As we described in a blog series on the need for and benefits on “on-bill” financing programs supporting home energy improvements in Appalachia, the sustainable development of the Appalachian region relies on the ability of residents to invest in their communities. But first and foremost, they must be able to afford their electric bills. The clear first step to achieving this vision is expanding energy efficiency, and this is something that Tennessee’s electric cooperatives have taken to heart.

On September 5, thanks to a generous grant from the National Governor’s Association (NGA), the Tennessee Electric Cooperative Association (TECA), in partnership with the Tennessee Department of Environment and Conservation (TDEC), sponsored a statewide energy efficiency “retreat.” The goal of the day-long policy retreat was to hash through the details of what will hopefully become a statewide program to finance home energy efficiency improvements, especially for low-income residents. Such programs have proven to reduce home energy costs substantially, and are primarily intended to help families that can’t afford to pay for the upfront cost of needed improvements. Below is a testimonial from one family that participated in South Carolina’s pilot on-bill financing program known as “Help My House.”

The retreat featured a number of experts in energy efficiency finance and program design as well as co-op and government administration, including numerous representatives from federal organizations and government agencies, Tennessee state government agencies and various experts and clean energy advocates such as Appalachian Voices and a handful of our partner organizations.

Most importantly, the retreat was attended by six of Tennessee’s rural electric cooperatives. Included among them was Appalachian Electric, which has proven to be a statewide leader in expanding energy efficiency opportunities not only for their own members, but for all of Tennessee’s rural co-op members. Unfortunately, of the six co-ops that participated in the retreat only two co-ops were from the Appalachian region, although we were told by TECA that a handful of others couldn’t attend but were interested in participating in the process. We hope that more co-ops with service territories in East Tennessee will sign on to the process, because as the energy cost maps we generated earlier this year show, members of Appalachian co-ops are most in need of support for reducing their electric bills.

The efforts of Appalachian Voices’ staff, through concerted outreach to Tennessee’s Appalachian electric co-ops and local stakeholders, played a key part in making the energy efficiency retreat happen, and as a result we were invited to participate as an expert stakeholder. We are extremely encouraged by the outstanding leadership that NGA, TECA, TDEC and Appalachian Electric are showing, and we admire their dedication to helping the families who need it most.

The prospect of a statewide on-bill financing program in Tennessee is exciting, and we remain committed to doing everything we can to seeing it through. Further, we appreciate everything you do to support our work. If you live in western North Carolina, get in touch, because we have a lot going on in your neighborhood too!

The Power of Energy Efficiency — Building a Stronger Economy for Appalachia (Part 5)

Tuesday, July 15th, 2014 - posted by rory

{ Editor’s Note } This is the final installment in a five-part series illustrating the need for greater investments in residential energy efficiency as an economic driver in rural Appalachia. In this post, we describe the efforts of Appalachian Voices and our allies in helping Appalachia realize its energy efficiency potential, and highlight some of the successes that have already been achieved.

Energy efficiency might not be the cool kid in the room to most people. That would be solar energy, smug ole solar). Energy efficiency is the smart kid sitting in the back of the room, the one that quietly goes about its work, that gets more done with less effort. It even helps solar succeed, because without energy efficiency, a whole lotta solar energy gets wasted, rendering it less economical compared to the fossil fuel bullies in the room.

But the fact that energy efficiency helps solar with its homework isn’t why it is exciting and important. Energy efficiency provides so many benefits beyond just serving as the cheapest way to meeting our energy demands (approximately 80 percent cheaper than solar). Energy efficiency helps alleviate poverty, creates and sustains local jobs, and promotes local economic development. It makes homes more comfortable and healthy, and reduces the environmental impact associated with our energy use. It also may be the most vital solution to Appalachia’s energy and economic future, as we’ve described in this blog series.

Click to enlarge

Click to enlarge

Yeah, solar does almost all of these things (and don’t get me wrong, solar energy is still awesome), but energy efficiency costs a lot less to achieve the same benefits, meaning it can have a much greater impact per dollar. In Appalachia, as in other regions of the U.S. where public and private investment in clean energy is relatively scarce, this is an important consideration, and it’s one of the main reasons why Appalachian Voices initiated our Energy Savings for Appalachia program last year.

Through this campaign, we are actively promoting cost-effective solutions that will help Appalachia realize its energy efficiency potential while maximizing the economic and environmental benefits along the way. And the potential is mind-blowing. A 2009 study on Appalachia’s energy efficiency potential found that an investment of $7 billion in residential efficiency improvements would save Appalachian families nearly $14 billion in energy costs by 2030, reducing the average home’s energy use by more than 15 percent and (based on the employment impact multiplier used in this study) creating more than 100,000 jobs in the process. This illustrates how, for a region made up of largely impoverished communities and families, energy efficiency could provide a significant economic boost and help reverse a long-standing struggle to develop and strengthen local economies in the region.

This is why Appalachian Voices and many of our allies have dedicated ourselves to promoting strong investment in cost-effective energy efficiency programs in Appalachia. We are working with rural electric cooperatives to develop home energy efficiency finance programs like those we’ve described in this series. We are inspired and joined in this work by our regional partners and allies, which include the Mountain Association for Community Economic Development (MACED) (Kentucky), the Southern Alliance for Clean Energy (North Carolina and Tennessee), Statewide Organizing for Community eMpowement (Tennessee), Southeast Energy Efficiency Alliance (SEEA) (regional), Kentuckians for the Commonwealth (Kentucky) and Environmental Defense Fund (EDF) (North Carolina). Recognizing the need and potential for improving energy efficiency in rural areas, each of these organizations are focused in part on working with the rural electric cooperatives that provide electricity to those communities.

As a result of the efforts of many of these organizations, there have been some key successes, and there is now a growing movement in Appalachia toward the development of financing programs for residential and commercial energy efficiency. Leading the way was MACED, which spearheaded the development of the successful and still-growing How$mart Kentucky program. In North Carolina, EDF helped with the development and launch of a pilot on-bill finance program through Roanoke Electric Cooperative. And just recently, SEEA launched the Southeast Energy Efficiency Finance Network, which aims to facilitate the expansion of public and private investment in energy efficiency throughout the Southeast.

Appalachian Voices' Energy Policy Director Rory McIlmoil and Tennessee Campaign Coordinator Ann League meet with representatives from Appalachian Electric Cooperative, the Tennessee Electric Cooperative Association, the USDA and Southern Alliance for Clean Energy to discuss the creation of a statewide on-bill financing program for residential energy efficiency. Photo credit: David Callis, Tennessee Electric Cooperative Association.

Appalachian Voices’ Energy Policy Director Rory McIlmoil and Tennessee Campaign Coordinator Ann League meet with representatives from Appalachian Electric Cooperative, the Tennessee Electric Cooperative Association, the USDA and Southern Alliance for Clean Energy to discuss the creation of a statewide on-bill financing program for residential energy efficiency. Photo credit: David Callis, Tennessee Electric Cooperative Association.

For our part, Appalachian Voices has achieved a high level of success in the 15 months since we launched our Energy Savings for Appalachia campaign. As a result of our efforts, the statewide Tennessee Electric Cooperative Association, in partnership with five member cooperatives, the Tennessee Department of Environment and Conservation, the National Governor’s Association, the U.S. Department of Agriculture and Appalachian Voices, is in the process of designing a small-scale on-bill financing program for residential energy efficiency. This is a significant step toward realizing Tennessee’s energy efficiency potential, and we are proud to be partnered with each of these caring and forward-thinking groups that are leading the way.

I could write forever about energy efficiency, Appalachia and the many great things that our partners and allies are doing to advance energy efficiency in the region. But once you get into the realm of naming a series a “pentalogy” (I had to look that up), it’s time to bring it to a close.

So I’ll end this series with one last pitch to you. YOU are the most important piece of this energy efficiency work. While a good number of electric cooperatives and other utilities are doing a lot to help their members and customers lower their energy bills, many are not. So much more could be done, and it likely won’t be unless you get involved. One way to start is by learning more about energy efficiency and programs that your utility could provide by visiting our Energy Savings Action Center. While you’re there, send your utility a letter requesting stronger home energy efficiency programs. But most importantly, get out in your community, talk to your neighbors about how energy efficiency could benefit them, and let your voice be heard! Without you, Appalachia will never achieve it’s energy efficiency potential.

Thanks for reading!

Community Impacts of Controversial Coalfields Expressway Project 
in Va. to Receive Thorough Review

Wednesday, June 25th, 2014 - posted by cat

Contact: 

Jane Branham, Southern Appalachia Mountain Stewards, samsva@gmail.com, (276) 565-6167 

Deborah Murray, Southern Environmental Law Center, dmurray@selcva.org, (434) 977-4090 

Marley Green, Sierra Club, marley.green@sierraclub.org, (276) 639-6169 

Adam Beitman, Sierra Club, adam.beitman@sierraclub.org, (202) 675-2385 

Kate Rooth, Appalachian Voices, kate@appvoices.org, (434) 293-6373

Appalachia, VA — The Federal Highway Administration (FHWA) has announced that the Virginia Department of Transportation (VDOT) will be required to conduct a full environmental review for a controversial 26-mile section of the Coalfields Expressway that would run through Wise, Dickenson, and Buchanan counties in southwest Virginia. Community groups in southwest Virginia and conservation organizations applaud the decision.

VDOT fundamentally changed the route and the nature of this section of the Coalfields Expressway when it partnered with coal companies to allow mountaintop removal mining as part of the project and failed to prepare a comprehensive analysis of its impacts on the community. The environmental study that FHWA is requiring must evaluate the public health and environmental harms of the proposal and examine a full suite of alternatives.

More than 85,000 citizens sent comments to VDOT and FHWA expressing their concerns about the harm that mountaintop removal mining associated with this project would have on drinking water, community health, and quality of life. Local citizens are also worried that the altered route would eliminate the economic benefits promised to the community because it would bypass local businesses, and the associated impacts from mining would detract from a growing tourism industry.

Three federal agencies, including the U.S. Army Corps of Engineers, the U.S. Environmental Protection Agency, and the U.S. Fish and Wildlife Service, also urged FHWA and VDOT to prepare a comprehensive analysis that considers alternatives and evaluates the social, economic and environmental impacts of the mountaintop removal mining which is integral to the project.

“This decision is good news for the people of southwestern Virginia,” said Jane Branham, vice president of Southern Appalachian Mountain Stewards. “We are pleased that FHWA and VDOT will take a hard look at the irresponsible and destructive mining practices that have already hurt our communities and that would be part of this ill-conceived strip mine/highway proposal.”

“We look forward to seeing a thorough review of the environmental consequences of this project, including an analysis of a range of highway alternatives that do not depend on mountaintop removal coal mining,” said Deborah Murray, senior attorney with the Southern Environmental Law Center. “The decision-makers must keep in mind the original purpose and need of the project –serving the local communities.”

“VDOT now has the opportunity to take a fresh, honest look at this project,” said Marley Green, a Wise County resident and Sierra Club organizer in Virginia. “We have the chance to figure out the best ways to improve transportation access and diversify our struggling mountain economy.”

“The decision made by Federal Highways is a critical one. Mountaintop removal coal mining has had a devastating impact on communities in southwest Virginia, and now the state will be required to examine this road fully before spending our tax dollars on a deal that only helps coal companies rather than the community,” said Kate Rooth, campaign director with Appalachian Voices. “Now, local business owners, landowners, and citizens whose clean drinking water would be impacted can help VDOT design a project to truly benefit Central Appalachia.”

>> Click here for more background

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About Southern Appalachia Mountain Stewards: Southern Appalachian Mountain Stewards (SAMS) is an organization of concerned community members and their allies who are working to stop the destruction of our communities by surface coal mining, to improve the quality of life in our area, and to help rebuild sustainable communities. www.SAMSva.org

About the Southern Environmental Law Center: The Southern Environmental Law Center is a regional nonprofit using the power of the law to protect the health and environment of the Southeast (Virginia, Tennessee, North and South Carolina, Georgia, and Alabama). Founded in 1986, SELC’s team of about 60 legal and policy experts represent more than 100 partner groups on issues of climate change and energy, air and water quality, forests, the coast and wetlands, transportation, and land use. www.SouthernEnvironment.org

About Sierra Club: The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 2.4 million members and supporters nationwide. In addition to creating opportunities for people of all ages, levels and locations to have meaningful outdoor experiences, the Sierra Club works to safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and litigation. www.SierraClub.org

About Appalachian Voices: Appalachian Voices is an award-winning, environmental non-profit committed to protecting the natural resources of central and southern Appalachia, focusing on reducing coal’s impact on the region and advancing our vision for a cleaner energy future. Founded in 1997, we are headquartered in Boone, N.C. with offices in Charlottesville, Va.; Knoxville, Tn. and Washington, D.C. www.AppVoices.org

The Power of Energy Efficiency — Building a Stronger Economy for Appalachia (Part 4)

Wednesday, June 25th, 2014 - posted by rory

{ Editor’s Note } This is the fourth installment in a five-part series illustrating the need for greater investments in residential energy efficiency as an economic driver in rural Appalachia.

Part 4: Closing Arguments — Why Rural Electric Cooperatives Should Provide Financial Support for Home Energy Efficiency Improvements

I love my electric utility. In fact, as I write, I am wearing a hat they gave me.

Mountain Electric is a small electric co-op serving just over 30,000 members in the rural mountains of East Tennessee. They have a small staff, but are always willing to help out if I have a question or problem. They also seem to sincerely care about the people they serve, and work hard to address member concerns. One way they do this is by helping to reduce members’ electricity bills through energy efficiency incentives and limited financing programs.

I also love Mountain Electric because they are part of a team of co-ops exploring the development of a small-scale on-bill financing program for home energy efficiency in Tennessee. Even more, I admire the co-op model and their potential for doing good in the communities they serve, and I have developed a good relationship with my co-op, as all members should. That’s why I wear the hat.

The Rural Electric Cooperative: History and Mission

I didn’t always know much about electric co-ops, and most people who aren’t a member of one — and even many who are — don’t know much about them either.

According to the National Rural Electric Cooperative Association, as late as the mid-1930s approximately 90 percent of all rural homes in America were without electricity. This was due to the fact that the large power companies did not think it was cost-effective to run thousands of miles of transmission lines to areas with low population density.

With the signing of an Executive Order by President Franklin Roosevelt establishing the Rural Electrification Administration in 1935, and the subsequent passage of the Rural Electrification Act the following year, a lending program was put in place that supported the creation of rural electric co-ops, and everything began to change. By 1953, more than 90 percent of farms across the nation had electricity, and today, more than 900 co-ops provide electricity to more than 42 million people.

[Notes: For those interested, NRECA has put together a neat map showing the growth in the number of co-ops over time. Also, REA is now the Rural Utilities Service, or RUS, and is part of the U.S. Department of Agriculture.]

[Notes: For those interested, NRECA has put together a neat map showing the growth in the number of co-ops over time. Also, REA is now the Rural Utilities Service, or RUS, and is part of the U.S. Department of Agriculture.]

What distinguishes co-ops from investor-owned utilities is that they are non-profit entities owned by the utility’s electricity customers. Every “member” owns a share of the co-op, and, at least in theory, has a direct voice in decisions made by the co-op. In addition, unlike large profit-driven utilities, co-ops operate according to the Seven Cooperative Principles, which include a voluntary and open membership, democratic governance by members, economic participation, autonomy and independence, cooperation among cooperatives and concern for community.

Why Co-ops Should Provide Home Energy Efficiency Loans

The seventh principle, that of concern for community, is described by NRECA as “working for the sustainable development of communities through policies accepted by [the] members.” This principle speaks directly to the mission of Appalachian Voices’ Energy Savings for Appalachia program, which is to work with electric co-ops in Appalachia to alleviate poverty and generate new jobs through the creation of comprehensive home energy efficiency loan programs known as “on-bill finance.” With on-bill finance, the electric utility provides a “loan” to a customer to make a variety of home energy efficiency improvements such as weatherization, insulation and new energy efficient heating and cooling systems. After the improvements have been made, the customer repays the loan through an extra charge on their electric bill. The intent of these finance programs is for the annual savings to exceed the loan payments, thereby resulting in a net reduction in their electric bills.

On-bill financing supports the concept of sustainable development by reducing energy costs for community residents (thereby alleviating poverty), and supporting the development of a local energy services industry, potentially creating hundreds of long-lasting jobs (e.g. energy auditors, home appliance contractors, retailers, etc) while helping to diversify and strengthen local economies. In addition, the widespread adoption of such programs would result in cleaner air and water and therefore healthier communities.

Many co-ops across the Southeast already provide some sort of financial support or incentives, such as rebates and credits on electric bills, for their members to invest in energy efficiency (does yours?). However, most of the cost of the improvements still have to be paid upfront by the member. Currently only five co-ops in Appalachia–all located in Kentucky–provide financing for their members to make multiple efficiency improvements all at once.

 

Barriers to Implementation, and Resources Available to Co-ops

One thing to recognize is that many co-ops face significant barriers to developing and implementing energy efficiency programs of any kind, much less full on-bill finance programs. First of all, like my co-op, a lot of co-ops have limited staff, and it takes a significant amount of staff time to put these programs together and have them be effective.

Secondly, it takes money, something which most co-ops also do not have because their cost of generating or obtaining electricity and distributing it to their members is on the rise. Further, co-ops have to pay for constructing and maintaining the distribution system (transmission lines, transformers, etc). In addition, most co-ops are still paying off debts associated with loans received to cover past expenses.

Finally, in a lot of areas, the lack of an energy services industry (energy auditors, retrofitters, retailers) means that contractors would have to be identified and certified before an on-bill finance program can be implemented. Each of these factors may pose a significant challenge for a co-op interested in developing a financing program. However, there are a growing number of resources available that can help.

For starters, the USDA now has two (and potentially three) funding programs that co-ops can access in order to fund an on-bill finance program. The two existing programs are the Energy Efficiency and Conservation Loan Program, and the Rural Economic Development Loan and Grant Program. While the requirements and details associated with these two programs are much different, they both provide a significant amount of funding that co-ops can use to fund the program. Another similar initiative known as the Rural Energy Savings Program may become available by as early as 2015, and would provide zero interest loans to co-ops specifically for the purpose of developing an on-bill financing program.

In addition, there are many different models that exist all across the country that co-ops can reference in designing their own program (we wrote about two of them in our last post), and the USDA and others are in the process of developing toolkits and model program designs to help co-ops put a workable and effective program together. Growing interest is also leading many government and nonprofit entities to offer funding and other support for these programs. One such leader is the Southeast Energy Efficiency Alliance, which offers a variety of financial assistance for energy efficiency programs. Appalachian Voices has also been supporting and partnering with co-ops in our region who are taking steps toward developing an on-bill finance program.

What YOU can do to promote more energy efficiency support through your electric co-op

While there is wealth of resources available to help co-ops navigate the process of designing, developing and implementing an on-bill financing program, the availability of these resources will itself not move a co-op to develop a program. If you are a co-op member, that responsibility lies with you.

Find out whether your co-op offers an on-bill finance program by visiting our Energy Savings Action Center, and if they don’t, then send a letter requesting that they develop one. Also, get out in your community and talk with your neighbors about how stronger energy efficiency investments can help strengthen your local economy and provide financial relief and greater comfort for those who need it.

Finally, get to know the people that manage your co-op. Call them up, stop in their office, invite them to a barbeque. You will find that they are good folks that care about you and your neighbors, and are willing to explore ways that they can do more to help all of their members. That is concern for community, and it’s the foundation of creating healthy, sustainable economies in Appalachia and elsewhere.

Virginians applaud new federal carbon pollution protections

Tuesday, June 3rd, 2014 - posted by cat

Business, health, farming, and national security leaders praise Environmental Protection Agency for protecting state

virginia-voicesRepresentatives of Virginia business, national security, health and agricultural sectors joined environmental advocates this week in praising the newly announced carbon pollution limits for existing power plants as necessary public health and security safeguards, and a beneficial economic driver.

The new EPA guidelines give states the flexibility to implement strategies that can increase energy efficiency and improve resiliency while reducing this harmful air pollutant. The local leaders called on Virginia Governor Terry McAuliffe to lead a robust and inclusive process for developing a bold state plan to implement the new standards in Virginia.

David Belote, retired U.S. Air Force Colonel, Virginia Beach:
“Anyone looking for a job in Virginia today wants to be in a growth industry. Reducing carbon pollution and growing our clean energy sector unlocks the doors to the new opportunities that Virginia’s businesses and workers have been looking for. Promoting clean energy and climate security isn’t a ‘war’ on anybody – it’s unleashing innovators and entrepreneurs to profit while improving the planet and the lives of its people.”

Dr. Anthony Smith, CEO of Secure Futures, Staunton:
“The proposed new carbon pollution standards represent a big step toward moving Virginia’s economy to cleaner fuel sources. “Retiring old and inefficient coal-fired power plants with solar and wind power will give more Virginians access to 21st century energy jobs, and the ability to enjoy healthier air and water.”

Dr. Christine Llewellyn, physician and radiologist, Williamsburg:
“We know that climate change is already occurring, but we also know that we still have time to prevent the most severe impacts if we act now to reduce carbon emissions. Policies such as the EPA’s proposed carbon pollution standards are an essential first step towards protecting the future for our children and grandchildren. These policies will not only reduce dangerous carbon pollution, but will also have other major health benefits.”

Tenley Weaver, owner and operator of Good Food – Good People, Floyd:
“When weather extremes get more uncertain, your regional food security is even more at risk. Climate disruption heaps costs on the shoulders of our farmers and threatens to put some of them out of business. The EPA’s initiative to limit carbon pollution is an essential step toward addressing the global warming crisis and its impacts, especially on organically grown local food crops.”

The Power of Energy Efficiency — Building a Stronger Economy for Appalachia (Part 2)

Sunday, May 11th, 2014 - posted by rory

{ Editor’s Note }This is the second installment in a five-part series illustrating the need for greater investments in residential energy efficiency as an economic driver in rural Appalachia. A proven strategy is the creation of residential energy efficiency loan programs by rural electric cooperatives in the region. In this post, we explore the need for greater economic diversity in Appalachia.

Part 2: The Need for More Economic Diversity in Appalachia

Driving through rural Appalachia, you’ll notice that many towns are small and look a lot like each other, at least in terms of the types of businesses and other buildings that you see. This is what I see as I drive through Johnson County, Tenn.

My hometown of Trade is the stuff of legend. This is where Tom Dula — the infamous main character of many versions of the folk song “Tom Dooley”– was caught after killing Laura Foster in neighboring Wilkes County, N.C., in 1866. It is also the easternmost town in Tennessee.

A typical Appalachian town like Trade is made up of a couple of small churches, a post office, local hardware and grocery stores, a school or two and hopefully a library, a pharmacy, a couple of locally-owned restaurants, maybe a handful of chain restaurants, a dollar store and a gas station or two. Many of these are pillars of any community. None, however, are sources of significant employment.

There are those towns that have benefitted from large industrial or manufacturing plants, or extractive industries that employ hundreds to thousands of residents, and there are indeed towns and cities in the region with bustling and diverse economies. However, economic specialization — the concentration of employment in a small number of industries — has caused cycles of economic distress for many communities over the decades.

Sadly, many of the traditional industries have faded or declined substantially, leaving behind weakened local economies. As a result, for most of Appalachia, poverty, high unemployment and the lack of economic diversity are persistent problems that have yet to be addressed in any comprehensive, effective manner.

There is a strong need in the region for economic planners and local governments to make economic diversification the central goal in laying out their short- and long-term development strategies. According to the Appalachian Regional Commission (ARC), of the 420 counties that make up Appalachia, 201 are “Distressed” or “At Risk,” meaning that they rank among the worst 25 percent of the nation’s counties in terms of economic status. Another 206 are designated as “Transitional,” meaning that they rank somewhere between the worst 25 percent and the best 25 percent of the nation’s counties. Only 13 counties are designated as being economically competitive with other counties in the U.S.

A Picture of Economic Diversity: According to the Appalachian Regional Commission, of the 420 counties that make up Appalachia, 201 are “Distressed” or “At Risk,” meaning that they rank among the worst 25 percent of the nation’s counties in terms of economic status.

A Picture of Economic Diversity: According to the Appalachian Regional Commission, of the 420 counties that make up Appalachia, 201 are “Distressed” or “At Risk,” meaning that they rank among the worst 25 percent of the nation’s counties in terms of economic status.

The poor economic status of most Appalachian counties correlates with higher-than-average poverty rates (the Appalachian portion of 10 of the 13 states in the region have a poverty rate higher than the national average), higher-than-average unemployment (8 of 13 states), and lower median incomes (all states) compared to the national average.

To realize how diversification can help strengthen and sustain Appalachian economies, it is important to understand what economic diversity means. According to a report commissioned by the ARC, “a diverse local or regional economy is viewed as one which has a varied mix of industries and the absence of dominance of any one industry in terms of employment or income.”

The authors of the ARC report cite two of the major benefits of economic diversity as reducing exposure to economic downturns and creating new avenues for economic growth. They caution, however, that “diversity does not guarantee faster growth, higher incomes, or more widely shared prosperity.” While these outcomes would be ideal, for many Appalachian communities simply achieving the goal of economic diversity would be an important step toward strengthening their local economy, and reducing poverty and unemployment.

The question is: how does a small town of merely hundreds or a few thousand residents diversify their local economy? Focusing on a single industry is not enough. What is required is a comprehensive plan and locally-based initiatives that support and promote a wide variety of industries or businesses. As the ARC report asserts, there are several lessons to be incorporated into any strategy for diversifying a local economy.

First, a good diversification strategy is a matter of implementing many successful specialization strategies simultaneously. This means focusing on the strengths and assets that exist within a local community and support the development of each of those at the same time.

Second, a local economic diversification strategy should seek to fully assess and understand the “risk” associated with the existing economic base of the local community. This means assessing the demand for the goods and services that can be produced from the local economy. Anticipating possible boosts and disruptions to the economic base is important.

Third, new economic opportunities — whether through business expansion, entrepreneurship, attraction strategies, or other economic development initiatives — should be nurtured through appropriate public sector actions (policies, incentives, marketing, etc).

Finally, a successful strategy for economic diversity is based on a solid
foundation of analysis and research that helps to maximize the resources and assets available to the local community. It is also run by development professionals that leverage networks and expertise, and that have a process in place for thoughtfully and effectively implementing the economic development strategy.

Each of these are good recommendations for implementing a local economic diversification strategy. But first, the strategy must be developed, and each of us has a role in promoting any such strategy. So, what will you do to play a role in diversifying your local economy?

For my part, I will begin by speaking with my local electric cooperative and trying to work with them to invest more in residential energy efficiency for my neighbors and the community at large. But this is only one of many initiatives that could support new jobs and economic development where I live. What does your local community need? I would bet that energy efficiency is one opportunity for creating new jobs and supporting economic diversity.

Part 3 of this series describes how energy efficiency can serve as a key strategy in developing, strengthening and diversifying local Appalachian economies, and how rural electric cooperatives can play a key role in achieving that goal. We hope you’ll continue reading as we progress through this series.