It’s Time to Adopt a New Energy Policy at PEC

Every morning I spend a little time perusing energy-related articles from publications across the globe. In my current role as a Board Director for Pedernales Electric Cooperative, I find it my prerogative and my duty to keep current on energy theory, energy policy, and topical opinions from conflicting perspectives. While tedious and repetitious at times, my morning studies have helped me become better acquainted with the industry in which the PEC membership has elected me to serve.

I would love to say that I always enjoy this process of information and opinion gathering. I would love to say that I even enjoy it half of the time that I’m engaging in it. The sad reality is that most of the time while I’m reading, I’m shaking my head in disappointment, and I’m doing so for two main reasons. The first reason for my dejection is that I find so much of what is presented to readers as “fact” to be based on incomplete data, doomsday conjecturing, and/or a desire to see certain theories proved out in the near future. It’s not uncommon for a person to talk up the high points of his or her argument and ignore the shortcomings. It’s natural enough, but when we accept only the high points as the facts and deny the shortcomings, and then use that incomplete picture to craft something as important as American energy policy, our society is bound to suffer. (Take for example this bit about the NASA “findings” that 2014 was the hottest year ever on record. After a three-day media blitz promoting these irrefutable findings proving out global warming, NASA had to admit that its degree of certainty that 2014 was actually the hottest year on record was quite low. And we wonder why Americans don’t trust the media these days.) The second lamentable point for me when reading energy articles is the absolutely disgraceful treatment of any party skeptical of current climate “data” and theory by the media and self-proclaimed environmentalists. Both of these points give me cause for great concern, primarily because they effect, to varying degrees, the way we make decisions at a place like Pedernales Electric Cooperative.

Just as I read these articles and grow concerned about American energy policy at a national level, I wonder to what extent misguided policy affects us at PEC. I’ll begin with what I mean when I mention incomplete data or inaccurate information. Let’s talk about two things I’ve seen a lot of lately. The first is in regards to water consumption and how it relates to traditional power generation. Since we live in a state that has faced concerning levels of drought over the past few years, it’s no wonder people are interested in preserving our resources and paying attention to areas where we can further conserve. Conservation makes complete sense when we are talking about our most precious resource. However, I often hear from advocates for renewable energy sources that traditional power plants, particularly those run on coal and natural gas, use too much water to remain viable. Part of their water conservation plan involves moving away from fossil fuels and towards renewables like wind and solar. In the doomsday scenario that they present, coal and gas plants “use” thousands of gallons of water every minute, and when we see the levels of Lake Travis, that water usage statistic paints a pretty scary picture. We could be out of water in no time thanks to fossil fuel power generation!

When you look further into the issue of water use, though, you can quickly discover the term “water consumption” is often confused with “water availability” or “water withdrawal.” The first type of water use constitutes the actual consumption of water that is not returned to its immediate water environment. The second refers to the diversion of surface water for use (in this case in power plants) with the ultimate destination of the same water almost wholly being back into the body of water from which it was drawn. In the case of traditional once-through coal and gas plants, only 3% of water used is actually lost to evaporation. So while it is true that a lot of water must be available to run these plants, primarily for cooling, only a fraction of the water used is actually “consumed.” Compare that level of water consumption to that which occurs from irrigation, which CONSUMES 80% of the water used by its processes, and we see why incomplete information can lead to poor decisions. I don’t hear anyone advocating for the end of crop irrigation, and it is a far bigger consumer of our precious water resources than is power generation! So why would we support a policy that seeks to move away from the cheapest, most reliable energy sources we have available to us when in the grand scheme of water consumption, those sources consume far less than that of other industries on which we rely?

One reason a person might present an incomplete “water-energy” nexus picture is to push for the quicker adoption of renewable energy resources. I have heard quite a bit about renewables, particularly solar energy since becoming a PEC Board member. Being in the Austin area, it’s no surprise that several people are advocating for utilities to adopt programs that encourage solar development, particularly in the residential space. One statistic I hear all the time is that the price of solar panels has plummeted in recent years, making residential solar systems affordable for more people than before. In addition to saving the planet, people have the opportunity to save money on solar panels, too! At first glance, an element of this kind of statement stands up to the data that is out there. It is entirely true that increased overseas production, primarily in China, as well as improvements in panel materials and design, have brought the price of solar panels down dramatically. So is now the time for everyone to buy solar panels for their homes? I’m not so sure. One thing I’ve discovered that solar proponents do not like to talk about is the entire “package” of a solar system installation. The panels themselves amount to roughly 33% of the total cost of a home system. The other 67% of the cost comes primarily from installation and labor, followed closely by permits/inspections and operational costs. While it is accurate to say residential solar is more affordable today than it has ever been, due to the drop in panel prices and the availability of Federal subsidies, we cannot escape the hard reality that the large chunk of money that must be paid upfront to install these systems is a barrier to entry that the average consumer – or in our case, the average PEC member – will not be able to overcome. Furthermore, the pricing structure is unlikely to change. Installation costs are not getting cheaper. With the panels themselves making up such a small percentage of the total cost of an installed solar array, we are unlikely to see significantly better prices for full solar packages than what we see now for residents. Don’t believe me? There are dozens of residential solar calculators out there that you can use to discover what it would cost for you to install a solar panel system on your home. One of my favorites was put together by solar aficionado Michael Bluejay, who admits on his site, despite being a major proponent of residential solar, that prices are unlikely to get a lot cheaper and may not bear out in actual dollars overtime.

I bring up the conversation of solar not to attack it or call its merits into question – I think technology is a wonderful thing, and people with means that can afford to energize their own homes are admirable in my opinion. I also think that there are economic models out there that demonstrate ways for utilities and customers to engage in mutually beneficial solar partnerships, and I am always open to ideas that give our members more options, as long as those options don’t take away from our ability to serve all our other members equitably. For me, the primary driver in bringing up this cost statistic in residential solar installation is to further prove out the point that renewables advocates and environmentalists provide only a partial view of the energy landscape, and while they may believe they are justified in doing so because of the cause for which they are fighting – the salvation of the planet from the evils of man-made climate change and destruction – I believe such a lopsided approach is harming the way we craft our Energy Policy at the federal, state, and Co-op level. And bad policy harms the end user – the PEC member – the most.

Today, electric co-ops, and, really, all electric utilities, are enduring an onslaught of pressure from the EPA and environmental groups to move away from traditional energy sources. Several new carbon emissions restrictions go into effect in a very short time, and these policies will undeniably raise electricity rates, put us in grave risk of losing electric reliability, and harm our economy. The EPA’s policies were crafted to intentionally kill the very industries that brought this country to world leader status and dramatically improved the quality of life for virtually every American for the past 80 years and counting. Jeff Jacoby, a columnist for the Boston Globe, penned a brilliant op-Ed earlier this month entitled “A Valentine for Fossil Fuels,” in which he admonishes groups pushing for corporate and university divestment from fossil fuels. In his article, Jacoby relives a powerful history of all of the good brought into the modern world through energy produced from fossil fuels and debunks several perpetuated ills of a fossil-fuel dependent world. Jacoby quotes economist Robert Bradley, Jr., saying “the energy derived from fossil fuels has ‘liberated mankind from wretched poverty; fueled millions of high-productivity jobs in nearly every business sector; been a feedstock for medicines that have saved countless lives; and led to the development of fertilizers that have greatly increased crop yields to feed the hungry.’” As Jacoby reminds us, as much as climate activists would hate to admit it, “ours is a much safer, richer, cleaner, healthier planet than it would ever have been without fossil fuels.”

The bottom line is there are pros and cons to every type of energy that we use today, fossil fuels and renewables included. It is important that we weigh the pros and cons of each source accurately when making decisions about our own Energy Policies at PEC. Based on the information I’ve seen and the studies I’ve undertaken, it is my opinion that any decision regarding adoption of renewables into the PEC power supply portfolio should be made on the basis of economics and reliability. We should not adopt any power supply that takes us away from our duty to provide that low-cost, reliable electricity that we were chartered to provide. We should move away from percentages and quotas and let the economic validity and reliability of the sources speak for themselves when making future power supply purchases.

I know I will take heat from some people for making these kinds of statements. I haven’t forgotten the morning I read an article by Mr. Justin Gillis of the New York Times entitled “Verbal Warming:  Labels in the Climate Debate.” As I read Gillis’ article, which essentially justified the name-calling and public shaming of those that had serious questions and skepticism when it came to the theory of human-induced climate change, I shook my head in disbelief that in our enlightened, civilized society, this was the party line on how to treat a person that disagrees with you. I also realized by the end of the article that I could likely face similar treatment if I voiced my own skepticism on the topic. (After this post I’m sure they’ll take me out of the running for the EPA’s 2015 Electric Cooperative Director of the Year Award.) I remember feeling conflicted about how to proceed. I’m sure most people that have had any interaction with me as a PEC Director know that I’m dedicated strongly to fiscal conservatism and consumer protections. What people may not have figured out yet is how far out on a limb I’m willing to go to stand for the things in which I believe. As the great American leader, and personal favorite of mine, Gen. Robert E. Lee famously said, “The trite saying that honesty is the best policy is met with the just criticism that honesty is not policy. The real honest man is honest from conviction of what is right, not from policy.”

My concluding point is that these are not times for those in positions of influence to shy away from what they believe to be right. These are times for people to muster the moral courage to speak up when they disagree and question when they don’t understand. Our world and our country are in desperate need of leaders to lay aside the desire to preserve political longevity in favor of a principled stand. I don’t pretend to be one of these great leaders. I have no illusions that my position on the PEC Board is any bigger than what it is – a local post in which I make decisions affecting member electric bills and service. All the same, I cannot divest myself from the inner belief that as a person in a position of power, no matter how small, I am morally obligated to follow the same ethical code that I want to see from those in higher power. And thus, I have resigned myself to whatever treatment comes from speaking out against the all-too-powerful environmental lobby. I did not join the PEC Board to make friends, although I will always treat my fellow Board Members, PEC management and staff, and most importantly the PEC membership with the utmost respect, of which they inherently deserve. I am not a PEC Board Director for the purpose of being “liked,” although I offer friendship to anyone I encounter and will gladly accept the same overtures. I am on this Board to perform my duty to the membership to make sound business judgments and to promote policies that lower electric rates and strengthen our Co-op’s ability to provide safe and reliable electricity to our service territory. If I’m asked to choose between my conscience as it relates to those two duties and being liked by those inside or outside of the Board Room or to avoid the unpleasantness that comes with picking the unpopular position, I will choose my conscience every time.

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