Sounds Political To Me!

[Danoinark]

Fish and energy needs clash in Midwest

July 20, 2009

JEFFERSON CITY, Mo. (AP) — Thousands of electric customers in several central U.S. states could be on the hook for the cost of improved trout fishing in northern Arkansas.

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That's the assertion, at least, of a regional electric company and some utility regulators who are waging a behind-the-scenes battle with the federal government over the financial effect of a plan that would reduce the hydropower capacity of several dams.

Residents in Arkansas, Kansas, Louisiana, Missouri, Oklahoma and Texas all receive electricity from dams in the White River basin.

The cold water that flows from those dams also provides a good habitat for trout.

But the needs of the fish can clash with the electricity demands of humans.

For decades, the U.S. Army Corps of Engineers has operated the dams that form Bull Shoals and Norfork lakes along the Arkansas-Missouri border as peak-power production facilities.

Large quantities of water rush through turbines to create electricity when it's most needed, such as on hot summer days. At other times, virtually no water flows forth.

That creates an unstable environment for trout, a popular game fish that can flourish in a consistently cold stream but can founder when water slows, pools and warms.

The "White River Minimum Flows" project, initially authorized under a 1999 federal law, would release a continual flow of water from the dams to improve trout habitat.

The assumption is that trout will live longer, grow bigger, become more abundant and lure more fishermen to northern Arkansas, boosting various tourist-dependent businesses, said P.J. Spaul, a spokesman for the Army Corps of Engineers office in Little Rock, Ark.

But one side effect would be a reduced capacity to produce electricity at the two federal dams and at an upstream hydroplant owned by The Empire District Electric Co., a Joplin, Mo.,-based publicly traded utility.

Empire, which generates power from Lake Taneycomo near Branson, Mo., serves about 167,000 electric customers, mostly in southwest Missouri but also in southeast Kansas, northeast Oklahoma and northwest Arkansas.

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Electricity from the federal dams is marketed through the Southwestern Power Administration to customers of rural electric cooperatives and municipal utilities in those four states, plus Texas and Louisiana.

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In January, the Southwestern Power Administration determined Empire would be due about $41 million in compensation for the energy it won't be able to produce because of the improved downstream trout habitat. But last month, the federal agency lowered that to about $22 million after changing its reimbursement formula.

Empire executives fear the newly proposed payment won't make up for its lost energy production.

"There's no Santa Claus here. If there are increased costs to help the trout fishermen in Arkansas, it's our customers who will have to end up paying for it" through higher electricity rates, said Brad Beecher, Empire's chief operating officer for electricity.

Empire submitted written comments earlier this month to the Southwestern Power Administration objecting to its revised compensation formula on a variety of grounds.

Among its protests is that federal officials failed to account for a new Missouri law setting targets for renewable energy production for utilities or for a bill in Congress that seeks to curb carbon emissions from power plants while encouraging green energy.

By cutting Empire's hydropower capacity, the federal government is forcing it to rely more on other power plants that are potentially less carbon-friendly, thus more costly, under a new national energy policy.

The four-member Missouri Public Service Commission, which regulates Empire, cited similar concerns in written comments submitted to the federal agency.

In a separate letter, commissioner Jeff Davis said he was "outraged" by the federal agency's revised reimbursement formula, claiming it undervalues Empire's hydropower and "cheats Missouri electric consumers out of millions of dollars more."

George Robbins, director of the Division of Resource and Rates for the Southwestern Power Administration, said its revised formula wasn't motivated by an attempt to reduce the federal government's payment.

"We certainly support the concept that these electric customers shouldn't have to support this recreational (trout) facility downstream," Robbins said. "What we're trying to do is make it rate neutral" for electric customers.

The new water flows from the dams in the White River basin are scheduled to begin in January 2011. Robbins said Empire's actual payment will be calculated with energy costs and interest rates in place at that time and may differ from the current $22 million estimate.

Robbins also said the federal agency would take into consideration the comments of Empire executives and Missouri utility regulators and make further changes to the formula, if deemed appropriate.

"We're just trying to make it as fair as possible," Robbins said.

[hoglaw]

The problem is that to really understand what's going on here, you have to have a fairly in depth understanding of the way the regional power grid works...which I don't.

I mean, if Bull is releasing water constantly at a minimum flow, it's not rocket science to know that less water is available for peak demand generation. If that's the case, that means that the grid has to purchase the same power from elsewhere at a higher rate, right? Well, who receives the revenue from operation of the BSD in the first place? Who actually owns the dam? If it's the COE, and they're subsidizing the trout fishery at the expense of neighboring states in the power pool, I guess they have a legitimate beef, but Arkansas users who don't benefit directly from the white river's economic impact are sharing the load too.

[Danoinark]

I also know nothing about the grid or how the power is allocated or who purchases it. But doesn't it make sense that if the turbines are turning even at minimum flow there is some power being generated and stored? Its been no secret that the power companies / COE / Southwest Power Admin have opposed minimum flow.

Dano

[bigredbirdfan]

All I know is powersite needs a new power generating dam. Have you seen the water just pour over that sucker without capturing any power at all?? And poor old Taneycomo gets the crap end of the stick with feast or famine for water flow. Seems to me minimum flow should apply to the whole entire basin and not just the big money players in Arkansas who wield plenty of Washington influence.

Oh yea. Its also laughable that we install these dams for power for the humans and now we use them to cater to mostly non-native species.

[rps]

When Congress funded the dam building, they created a priority list for use of those dams. First on the list was flood control. Second was generation of power. Remember TVA dams were hero makers for the previous generation of Congress. Recreation and tourism were not on the lists. Thus, until the minimum flow movement began to have success, every decision for water release was based solely on flood control and electrical generation.

Over the years, the pattern developed to hold the water, like pools of oil, and to sell the generated electricity during peaks. That way, the funds recieved to pay for dam maintenance and to "justify" the original building were maximized. At the same time the cost to consumers for power during peaks was reduced by the available product put on the market at times of highest prices. The trick, for the corps, was to do this in a way that did not interfere with the first priority - flood control. The contracts between the corps and the electric companies are elaborate documents stating the parameters for who controls releses at what times, levels, and under what conditions.

The bottom line is that Congress never really changed the dam's priority list. Instead deals have been made to add some consideration for the fish and the tourists. Some consideration. That's it. No real promises. Will that ever over-ride the interests of the electric consumers, the powerful electric coops, and the farmers down stream. Duh. No.

BTW, these same factors explain why BS and TR were kept high all last summer. The farmers down stream were too wet to plant and talked to their Congress men. We are just lucky we didn't have two Springs in a row like last year.

[hoglaw]

Dano:

I'm sure I'll get some of this wrong...I'm not an engineer. This is my understanding of how things work though:

As I understand it, no generation can take place at "minimum flow." The thing about producing electricity is that it isn't stored anywhere. It's generated at the same rate that it's used and it travels through the grid at the speed of light(ish). In order to ramp up a generator, they have to get the thing spinning fast enough to produce electricity at 120hz. That means they can't just let it spin a little. It's either engaged, or it isn't. I think it even takes an electrical load to produce, so if you're not producing properly, you're wasting power rather than supplying it. The generators come on during peak demand because the regional grid gets close to capacity. Once all the nuke's and coal capacity is being used, these other intermitent generators come online to increase the capacity in the grid. Now, what happens when you're generating 100 megawatts but only using 90 is way beyond me and probably advanced physics. I just know these things kick on to decrease strain on the grid, and therefore they get top dollar for the electricity they produce since it's peak-demand emergency power. Mimimum flow means that whenever they're not generating, they're losing generation potential because water is being let out.

So anyway, who gets the money that the rate payers pay for BSD's electricity?

[Danoinark]

I knew I should stay out of this discussion. My knowledge of electricity consists of turning on the switch and the lights come on.

Dano

[Gavin]

A loss of $41,000,000 of revenue spread over how many customers?...I'd imagine that it works out to less than a couple pennies a day for folks in their service area.

[bigredbirdfan]

A loss of $41,000,000 of revenue spread over how many customers?...I'd imagine that it works out to less than a couple pennies a day for folks in their service area.

$41,000,000 / 167,000 / 30 days = $8.18

If your bill is $150 = 5.5%

[DaddyO]

$41,000,000 / 167,000 / 30 days = $8.18

If your bill is $150 = 5.5%

Maybe I missed something. Was the $41 million per month or per year? Per month seems like too much if this is just supposed to be to augment the other energy sources. i.e $245 per month per customer. So, if the $41 million is per year, that works out to about 67 cents per day per customer.

I know that when I am in Arkansas, fishing, I spend more than 67 cents per day.