Coop Issuing RFP for Distributed Generation

Split Rock Energy, a wholesale power marketer and trader and wholly owned subsidiary of Great River Energy, has issued and will issue two request for proposals (RFP) for two very different types of power resources: baseload and distributed generation.

The baseload RFP seeks proposals offering up to 200 MW of baseload resources to be on-line by May 1, 2011. The distributed generation RFP will request proposals using distributed generation to meet a very specific application – avoiding additional transmission investment while improving reliability in certain areas. Great River Energy will use the results of the RFP to determine if it can more cost effectively improve reliability in specific situations using distributed generation rather than by building additional transmission.

The distributed generation RFP documents should be available by January 14, 2005. Great River Energy is also seeking indications of interest prior to actually issuing the distributed generation RFP.

Democratic Energy finds this development very encouraging and we support the efforts of customer-owned utilities to fully investigate the opportunities that distributed generation can provide to their owner/members. We believe that all utilities should seek to maximize the efficient use of their existing transmission and distribution system rather than build new lines. We'll check back and see what happens with this RFP in 2005.

Great River Energy, which serves 28 distribution cooperatives, is one of the fastest growing energy providers in the state of Minnesota. It presently has a generating capacity of approximately 2,300 megawatts.

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California Feels Global Warming Heat From Automakers

A coalition of U.S. and foreign automobile manufacturers and car dealerships in California joined together to file a lawsuit against California's innovative rule to reduce greenhouse gas emissions from vehicles in that state. In a tug of war between federal and state authority, the stage is set for a public debate on how far a state can go in directing its own energy future.

Ironically, the lawsuit against California came nearly the same time as U.S. federal government representatives solidified the Bush Administration's position as climate change skeptics. The US chief climate negotiator, Harlan Watson, spoke at the international climate change conference taking place in Argentina saying, "Kyoto was a political agreement. It was not based on science." The Administration has also opposed efforts to increase the fuel economy standards of the nation's vehicles.

With the Bush Administration's clear intent to avoid any public policy initiatives to lower greenhouse gases, California says that they are exercising authority that was given to them under the federal government's passage of the Clean Air Act. California is the only state empowered under the federal law to pass stronger air pollution standards than those set by the federal government. Other states can then choose California's standards, but cannot be the first to surpass those set by the federal government. Thus, passage of a California law requiring reduced greenhouse gas emissions from cars eventually could spark changes in the design of automobiles sold across the country.

The furor generated by California's greenhouse gas rules stems from the fact that the only way that automobile manufacturers can meet the new standards is by increasing the fuel economy of the vehicles that they produce.

We here at Democratic Energy applaud California's efforts to push the transportation emissions envelope and increase the fuel economy of vehicles for the rest of us. But in the face of an uncertain outcome in the courts, perhaps Governor Schwarzenegger should adopt a stronger biofuels strategy as an insurance policy in case the ruling goes in favor of the automakers? Biofuels can reduce greenhouse gas emissions from cars and trucks too. Just a thought.

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Voters Decide to Take Control of Their Electric Systems in Three Cities

Everyone knows that President Bush was reelected on November 2nd but did you know that voters in three municipalities voted to take control of their electric systems? In Rolfe, Iowa (pop. 675), the vote was 182-19, in Wellman, Iowa (pop. 1,393) the vote was 470-159, and in Auburn, New York (pop. 28,574) the vote was 4,726-987 to allow their cities to form municipally-owned power companies. The two Iowa cities already control their natural gas utilities so the move toward electricity should be a natural extension. Auburn voters hope that electricity costs can be cut dramatically through a combination of local control and ownership of the electric distribution system and the development of renewable energy and efficiency projects. The American Public Power Association says that only 46 municipalities have successfully established public power agencies in the last 20 years.

Auburn, NY

With the passage of the ballot initiative in Auburn, NY, city leaders are examining the feasibility of building some renewable energy projects including a small hydro plant, a landfill gas-to-energy project and wind projects. They believe these new projects will allow them to distribute electricity throughout their city for less than the 13 cents/kWh currently being charged by New York State Electric & Gas Corp. (NYSEG). According to reports, Auburn will soon begin talks with NYSEG to try to buy the investor-owned utility's wires and poles in Auburn.

The municipal power authority was an initiative in Mayor Tim Lattimore's re-election campaign. In a public meeting prior to the November 2nd election, Mayor Lattimore argued that taking full control of the electric system was a natural extension for the city since it already has several electric power plants operating including a geothermal system (providing heating and cooling for City Hall and part of Cayuga Community College), landfill gas plant, and two hydroelectric dams. The new agency will recommend and develop alternative energy sources, purchase power on the wholesale market and negotiate with New York State Electric & Gas for the use of substations or transmission facilities.

Rolfe and Wellman, IA

In the midwest, residents in Rolfe and Wellman, Iowa, will be expanding their local control of energy into the electricity sector. Each city currently operates their natural gas utilities. Both communities are currently receiving their electric service from Alliant Energy. News reports indicate that more than a dozen cities in Iowa have been considering taking control of their electric systems since a feasibility study and financial analysis released in 2003 showed that 19 Iowa cities could at least break even and, in some cases, realize substantial savings if they formed municipally-owned utilities. The study was completed by Latham & Associates (Cedar Rapids, IA). The cost was shared by the cities based on their size.

The next step for the two Iowa communities is to start negotiations with Alliant to buy out the investor-owned utilities assets. If a deal is unable to be struck, the cities could take their case to the Iowa Utilities Board.

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Private Company Offers Employees $5,000 to Purchase Fuel-efficient Vehicles

While Democratic Energy is primarily tracking energy innovations in the public sector, we thought that you'd be interested in this energy policy development from the private sector announced last week by the Hyperion Solutions Corporation.

Hyperion, a software company based in Santa Clara, CA, is providing up to $1,000,000 a year in rebates to encourage its employees to purchase fuel-efficient cars. Up to 200 employees a year are eligible on a first come, first serve basis for $5,000 toward the purchase of a vehicle getting at least the equivalent of 45 miles per gallon of gasoline. The standard can be met by fuel-efficient vehicles using technologies such as hybrid, diesel and electricity that increasingly are available in most of the countries in which Hyperion does business. Hyperion calls its program the "Drive Clean to Drive Change" initiative. As of September 30, 2004, Hyperion employed 2,485 employees worldwide and employees who have been with the company one year or longer can seek reimbursement for one vehicle every four years. Hyperion also launched the Companies for Clean Air Consortium to help other companies create similar programs.

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