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According to ABC News, a new intelligence report from the Department of Homeland Security (DHS) issued Tuesday, entitled Insider Threat to Utilities, warns “violent extremists have obtained insider positions,” and that “outsiders have attempted to solicit utility-sector employees” for damaging physical and cyber attacks.

The report goes on to say, “Based on the reliable reporting of previous incidents, we have high confidence in our judgment that insiders and their actions pose a significant threat to the infrastructure and information systems of U.S. facilities,” the bulletin reads in part. “Past events and reporting also provide high confidence in our judgment that insider information on sites, infrastructure, networks, and personnel is valuable to our adversaries and may increase the impact of any attack on the utilities infrastructure.”  Which is DHS jargon when translated says, if terrorists infiltrate our utilities we are in trouble.

In the materials recovered after the Navy SEAL operation that killed Osama bin Laden in May, officials found evidence bin Laden was seeking to repeat the carnage of the Sept. 11, 2001, terror attacks on or around its ten year anniversary and there are a lot of very sensitive facilities where someone can get a job on the inside, get access to a control room, and flip a switch – causing an electric power grid to short circuit or a pipeline to explode or OMG, other mayhem happens like with the guy in the insurance commercials.  At a minimum, something like this could disrupt the lives of 10s to 100s of thousands of people.

The Department of Homeland Security said in a statement there was no specific threat, so let’s hope no one moves on a threat of this nature this week with most of the country sweltering from a record breaking heat wave.  OMG, that would cause mayhem!

Update

A round of applause for former Public Citizen researcher, TexasVox’s number one fan and all around know-it-all — Matt Johnson.  He found a link to the report referenced above.  Click here if you want to read this Homeland Security report.

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Solar Austin held a debate between Austin City Council Place 3 candidates Randi Shade and Kathy Tovo. The focus was on energy issues. Here is a brief excerpt from the debates where each candidate addresses a question about how an increase of electricity rates should be handled.

[vimeo=25250426]

The election is this Saturday, June 18. You can view the entire debate here:

[vimeo=25244125]

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Lake Travis Levels Plummeted During 2009 Drought

Today the Lower Colorado River Authority (LCRA) Board of Directors delayed a vote on providing water to the “White Stallion” coal plant proposed for Matagorda County. Though White Stallion’s Chief Operation Officer, Randy Bird, was expecting and asking for approval of a contract today, the board chose to delay action until August 10. This makes sense considering that they were confronted with more than 30 people who signed up to speak against the coal plant, some driving from as far away as the Gulf Coast (some taking off work) in order to be there. This delay is a victory for those opposing the coal plant and a step in the right direction in convincing the LCRA that this project is not a beneficial or responsible use of water from the Colorado River Basin.

Key concerns included the general aspect of this project and the negative effects it would have on the people, environment (and watershed) of the region. There were also, as expected, many concerns regarding the current drought and many agreements that the last thing LCRA should consider is adding more, firm water commitments particularly when LCRA is already asking customers to conserve and scale back their water use. Concerns about how global warming would further worsen dry conditions in the region over the next 55 years (the length of the proposed contract) were also voiced by many of the speakers.

“Even though they haven’t denied it yet, we’re glad they’re taking their time to look into the serious implications of this coal plant request” said Lydia Avila with Sierra Club.  “We’re confident that when they look at the facts they will realize this is a bad deal for Texans and reject it.”

Only one or two people spoke in favor of granting the contract, one of whom was Owen Bludau, Executive Director of the Matagorda County Economic Development Corporation – one of the original entities that worked to bring the White Stallion proposal to Bay City. Those speaking against the contract included Matagorda County Judge Nate McDonald, Burnet County Judge Donna Klaeger, David Weinberg (Executive Director of the Texas League of Conservation Voters), Doctor Lauren Ross (who recently released this report on how White Stallion would affect water in the Colorado watershed), and many others including concerned residents throughout the LCRA region and landowners located right next to the proposed plant site.

Public Citizen applauds LCRA’s decision to table this vote. It shows that the LCRA takes the concerns of their stakeholders seriously. The next two months should prove to the LCRA that this coal plant is both unnecessary and a waste of our most precious and dwindling resource: our water.

Update and thank you!

Public Citizen wants to thank all of you who responded to our emails, blogs, tweets and phone calls and either called, mailed, or emailed comments in, and to those who showed up and packed the meeting room today.  This decision would probably have been very different if you had not made your concerns know to the board.  You are all awesome!

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Election season is imminent and advocates for environmental welfare and public health need not look very far for the hyper-political red tape and drawbacks to pollution legislation. Like many of her colleagues in the Democratic Party, Environmental Protection Agency Administrator Lisa Jackson has been campaigning nationwide for the regulation of toxins such as mercury from coal burners which, in effect, could prevent thousands of related deaths and stimulate the job market. Just two weeks ago, Jackson even made an appearance on Jon Stewart’s “Daily Show” encouraging viewers to exercise vigilance in the fight against toxic emissions and to demand personal protections for clean air and water.

Her sentiments were met with grand applause due to their pertinence in 2011 where it is estimated that 72% of all toxic mercury air pollution in the United States is attributable to coal plants in violation of the Clean Air Act. Just to add some perspective to this statistic, such a figure indicates that 386,000 tons of hazardous compounds are being emitted into the atmosphere per year at an unprecedented rate.

Jackson’s apparent support for tightened environmental regulations was short-lived however, when just one week following her Comedy Central interview the EPA halted essential protections for controlling exposure to air-borne mercury, arsenic, lead, and a plethora of acid gases. The basis for these laws were established in 1990 when President H.W. Bush signed Clean Air Act amendments into law thus making it the EPA’s responsibility to establish emission standards for industrial facilities. Originally, these plans operated on a permit system designed to pinpoint power plants, factories, and additional sources of ground level ozone that had exceeded allowable limits for what was deemed “requisite to protect the public welfare.”

One of these statutes created under H.W. Bush’s administration, called Boiler MACT, monitored emission caps from boilers that produced power sources specifically like those found in large to small coal plants. As of February 2011, under a court issued order, the EPA was also charged with the task of enforcing this body of legislative action. And now, a mere two years after the Obama administration vowed to protect the interests of public health and respect the law, this regulation is one of many that Jackson’s post at the EPA has indefinitely delayed.

Historically, the EPA has acted as an outspoken critic of the industrial “Powers that be” and their habits of ignoring Clean Air Act restrictions with economic impunity. In fact it was the EPA’s records that first indicated that more than 4,000 non-fatal heart attacks, 1,600 cases of acute bronchitis and an excess of 313,000 missed work and school days could be avoided if these laws were enacted properly- and this doesn’t even account for the upwards of 6,600 toxic related deaths. But the EPA strayed its course due to the fast-approaching 2012 elections. They managed to place re-election aspirations above environmental necessities on the hierarchy of political agendas, caved to industry pressures, and watered down many of their contingencies to begin with.

In lieu of this regressive blow to mandatory emission guidelines, Lisa Jackson and the EPA as a whole have endangered countless vulnerable Americans by casting a blind eye to the Boiler MACT legislation. Not only are these steps in reverse potentially (almost certainly) disastrous, people living near industrial giants and coal-fired power plants are now at serious odds with their own health and well-being.

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In  an energy  article published todayThe New York Times reports German Prime Minister Angela Merkel abandoned plans for extending the life of Germany’s nuclear power plants and ordered them to be closed by 2022.

This is a stunning reversal of energy policy for the German Chancellor considering she approved plans 9 months ago to extend the country’s nuclear power plants.  The decision, still facing legislative approval, was popularly endorsed by environmental groups and expected to be warmly received by voters.

In recent days, hundreds of  thousands of protesters have taken to the streets  demanding for the end of nuclear power dependency  spurred on by the  nuclear meltdown at the Fukushima plant in Japan. Reportedly, the nuclear crisis has been believed to have been the culprit for Mrs. Merkel’s party losing control in the election of the  German state of Baden-Württemberg for the first time in 58 years. The election was based on a energy policy referendum.

Switzerland recently unveiled their plan to phase out nuclear power dependency by cutting plans to build new nuclear plants and  promising to close nuclear plants when they reach the end of their normal operating lives. However, surrounding European states, France, the Netherlands, and Poland, still remain committed to building new nuclear power plants or maintaining their current nuclear plants.

What can the state of Texas take from this new German energy plan? Well, admittedly not much.

After a recent legislative session spent passing SB 1504, A.K.A Simmons’ Bill, and SB 1605, another Harold Simmons/WCS led bill on the Texas Low-Level Radioactive Waste Disposal Compact Commission, Texas Legislature sadly is not in a position to propose new aggressive measures to phase out nuclear power dependency. But the people do have a voice.  Write your congressmen and representatives, and if you live close to a nuclear plant, attend town hall meetings and ask poignant questions on nuclear power. Demand a nuclear-free Texas.

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If you have been thinking about a new appliance, this weekend is a good time to get one, just remember to look for the energy star label and you will save dollars now and for the life of the unit. Something new for you that will help preserve our scarce resources and some cash at the same time.
Here is the announcement from the state on the offer

REMINDER: Save on Appliances This Weekend During the ENERGY STAR® Sales Tax Holiday – May 28-30, 2011 (more…)

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According to a press release from ERCOT, Texas posted a 30 percent increase in energy from renewable sources in 2010 with voluntary participation in renewable energy credits up 45 percent

Below is ERCOT’s press release:  

MAY 13, 2011, AUSTIN – Texas posted a 30 percent increase in energy generated by renewable sources in 2010, according to the state’s renewable energy credits registry administered by the Electric Reliability Council of Texas (ERCOT), grid operator for most of the state. 

The renewable energy recorded in the state’s renewable energy credit program was 28 million megawatt-hours (MWh) in 2010, compared to 21.6 million MWh in 2009 – a 30 percent increase – as reported in the Texas renewable energy credit program annual report, filed today at the Public Utility Commission.

Wind generation represented the largest share at 26.8 million MWh.  Solar energy increased the most, by percentage, going from 4,492 to 14,449 MWh.

RENEWABLE ENERGY PRODUCED IN TEXAS

Fuel

Type

2010 (MWhs)

2009 (MWhs)

Increase (%)

Biomass

97,535

73,364

33

Hydro

609,257

507,507

20

Landfill gas

464,904

412,926

13

Solar

14,449

4,492

221

Wind

26,828,660

20,595,989

30

Total

28,014,805

21,594,278

30

Competitive retail electric providers must annually acquire and retire renewable energy credits based on their load-ratio share of the state’s renewable portfolio standard mandate.  Any electric provider may voluntarily retire renewable energy credits to substantiate “green energy” claims. 

A renewable energy credit (REC) is a tradable instrument that represents one megawatt-hour of renewable energy produced. 

For the third consecutive year, the RECs retired in the voluntary market exceeded the mandatory retirements:

  • 11.83 million RECs were retired in the voluntary market – a 45 percent increase over 2009’s record of 8.94 million;
  • 9 million RECs were retired by the state’s 168 competitive retail electricity providers in compliance with the state renewable portfolio standard;
  • 20.86 million total RECs were retired in 2010 compared to 15.7 million in 2009 and 13.5 million in 2008.

RENEWABLE ENERGY CREDIT RETIREMENTS

 

2010 (millions)

2009 (millions)

2008 (millions)

Retired for mandate

9.03

6.79

6.73

Voluntary retirements

11.83

8.94

6.77

Total

20.86

15.73

13.50

Since 2008, the program has also awarded compliance premiums in conjunction with a REC that is generated by a non-wind renewable energy source.  For the purpose of the renewable portfolio standard requirements, one compliance premium is equal to one REC.  Last year, 11 companies were awarded a total of 275,910 compliance premiums, representing

COMPLIANCE PREMIUMS – NON-WIND RENEWABLE SOURCES

 

2010

2009

2008

Number of companies

11

10

5

Compliance premiums awarded

275,910

200,570

155,006

The Texas Legislature established the renewable portfolio standard as part of the restructuring of the state’s electricity market in 1999 to increase incentives for renewable energy production.  The Texas Public Utility Commission implemented the renewable energy credit program in 2001 and established ERCOT as the administrator. 

The program currently includes 107 generation accounts representing a total of 10,515 MW of new renewable generation added in Texas since 1999.  (An additional 298 MW registered in the program is from six renewable generation resources that were in service prior to September 1999 for a total of 10,813 MW.)  Texas exceeded 10,000 MW of renewable capacity last year, which achieved the Texas Legislature’s goal of 10,000 MW of renewable generation by 2025 – 15 years early.

CAPACITY REGISTERED IN TEXAS REC PROGRAM

FuelType 2010 (MWs) 2009 (MWs) 2008 (MWs)
Biomass 108 40 37
Hydro 33 33 33
Landfill gas 88 80 72
Solar 21 1 1
Wind 10,265 9,915 8,158
Total 10,515 10,069 8,301

Does not include generation in service prior to September 1999.

The megawatts of capacity reported in the REC annual report may not align with total renewable resources registered in ERCOT planning reports and other reporting agencies because it includes renewable generation throughout Texas, not just ERCOT. In addition, the program is voluntary and only tracks renewable resource generation registered in the program.

Online:

Renewable Energy Credit Program – Annual Report, 2010

Texas Renewable Energy Credit Program website

PUCT Substantive Rule 25.173: Goal for Renewable Energy

ERCOT Protocols, Section 14: State of Texas Renewable Energy Credit Trading Program

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Towards the end of January an independent panel of judges, the Office of Public Interest Counsel, and the EPA all recommended that the Texas Commission on Environmental Quality deny the proposed permit for the Las Brisas petroleum-coke burning plant based on its multiple deficiencies and clear violations of the Clean Air Act. The Perry-appointed commissioners approved it anyways. According to its permit, Las Brisas will emit 220 pounds of mercury, 100 pounds of lead, 8,096 pounds of sulfur dioxide, and 1,767 tons of particulate matter every year.

Communities in Corpus Christi are left with few options: the ultimate authority of the EPA, and the leadership of their elected officials.

“This is my hometown, and I love it,” Rebecca Lyons, a graduating honors student at TAMU Corpus Christi, told Matt Tresaugue of the Houston Chronicle back in January, “But I don’t want to raise a family here because of the health risks…There has to be a better way.”

After hundreds of letters, petitions, and phone calls made to the EPA, Corpus Christi residents are taking their fight to the online world. Join us!

[youtube:http://www.youtube.com/watch?v=CKmMBm0qFKM]

Take Action Online!

Copy and paste this status and video to the EPA’s Facebook pages!

Corpus Christi doesn’t want Las Brisas. Stop the air permit now! http://bit.ly/merA7n

EPA’s Facebook Page: http://on.fb.me/X4FYe

EPA Region 6 Facebook Page: http://on.fb.me/lBXW9C

Administrator Lisa Jackson’s Facebook Page: http://on.fb.me/130rQ6

Are you on Twitter? Tweet with us!

@epaGOV @lisapjackson I want clean air! Stop the Las Brisas air permit in Corpus Christi, TX!
http://bit.ly/merA7n

Ready to go the distance?

Ask your elected officials if they support responsible growth, or Las Brisas. Copy and paste this to their Facebook pages:

I’m a voting constituent, and I don’t want Las Brisas. Do you?
http://bit.ly/merA7n

US House Rep Blake Farenthold: http://on.fb.me/f2XnkP

State Rep Connie Scott: http://on.fb.me/jj0qJv

State Rep Todd Hunter: http://on.fb.me/mpSG5d

Mayor Joe Adame: http://on.fb.me/km137a

State Senator Judith Zaffirini: http://on.fb.me/lbxOW5

State Senator Juan “Chuy” Hinojosa does not have a Facebook page.
Send his office an email instead!

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Today, the Senate Natural Resources Committee passed out a state energy policy bill that no longer calls for the closure of the state’s worst air polluting power plants

According to committee chair Troy Fraser (R-Horseshoe Bay), Senate Bill 15 would create a 12-member Texas Energy Policy Council to advise legislators on “strategic, market-based” energy and environmental choices over the next 20 years.  We all know how well favoring market-based energy has worked since deregulation here in Texas.

The committee substitute for the original bill that was filed clearly favors coal-fired electric plants even though Fraser sold the committee on the idea that it was not intended to give a competitive advantage for one type of generation over another.

The bill, also directs the Texas Railroad Commission, to conduct a study projecting reserves and future prices of coal and natural gas.

The bill, as filed, directed the Public Utility Commission to identify the heaviest air polluting power plants and recommend closure of at least 4,000 megawatts worth of electric generating capacity.  The bill, as substituted and passed out of the committee, removes that language and instead would only require identification of the 10 percent of electric generating capacity that would be “most impacted by compliance with environmental regulation” and “barriers to retirement” of those plants.

The new energy policy council created by the bill would consist of officials from the Texas House and Texas Senate, the Public Utility Commission, Texas Railroad Commission, Texas Commission on Environmental Quality, General Land Office, Electric Reliability Council of Texas, State Energy Conservation Office and academia.

So chalk up another win for fossil fuels, at least so far this session.

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On April 13th, the Uptown Marble Theater at 218 Main Street in Marble Falls will present the world theatrical premiere of Green Dreams, a 50 minute documentary about the revolution at the Pedernales Electric Cooperative. Following the screening will be a meet & greet with PEC’s newly-hired CEO, R.B. Sloan.

[vimeo 21828817]

Former PEC General Manager Bennie Fuelberg has been sentenced to 300 days in jail, the entire former board of directors has either resigned or been voted out. The co-op has been wracked with scandal and tales of intimidation and mismanagement.

But a new day has dawned. PEC has a new, leaner, reform-minded board of directors, new bylaws and a member Bill of Rights. Transparency and member input have become desirable goals when once they were forbidden. And, some say, it all began with a phone call.

In 2006, filmmaker Ric Sternberg called the PEC, his electric co-op, for information about any “green” programs that the co-op might offer. This phone call led to more calls until he began to realize that decisions were being made by what appeared to be a rubber-stamp board of directors who maintained their well-paid positions, some for as many as 40 years, by a proxy voting process that was rigged – no competition.

Ric registered a web domain and organized a loose-knit group of PEC members who called themselves PEC4U. That rag-tag organization began the struggle for democracy and transparency at the Pedernales Co-op, which soon led to a member lawsuit and the “house of cards” crumbling. Meanwhile Ric, being a documentarian, started to record the process. Green Dreams is the result. It tells the story of the revolution and then talks about the future as it might be. The film is being presented as a conversation-starter – the beginning of a dialogue among members about where PEC should be headed.

The film screening will be followed by a meet & greet – an opportunity for PEC members to meet R.B. Sloan, the Pedernales Electric Co-op’s brand new CEO.

The theater will open at 7:00pm for casual socializing. The program will begin at 7:30pm. After the screening, the filmmaker and some of the people seen in the film will be available for Q&A. The meet & greet with Mr. Sloan will be in the theater’s lobby, beginning at about 8:45pm. Admission is free and all are welcome.

The documentary will be shown at other theaters in the PEC service area.  Watch for other scheduled showings.

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While Texas Legislators are furiously looking under every couch cushion to find more revenue this bienium, the Alliance for Clean Texas today highlighted a half dozen strategies that could help Texas close its $27 billion budget deficit.

Texas League of Conservation Voters Press Conference on Green Revenue March 29, 2011

Alliance for Clean Texas Members (l to r) Luke Metzger, Environment Texas; Tom "Smitty" Smith, Public Citizen Texas; Robin Schnieder, Texas Campaign for the Environment; David Weinberg, Texas League of Conservation Voters; Cyrus Reed, Lone Star Chapter Sierra Club - photo courtesy TLCV

As lawmakers are loathe to talk about the dreaded “T” word (tax),  groups like Public Citizen, Sierra Club, Texas Impact, Texas Campaign for the Environment, and Texas League of Conservation Voters, who sponsored this morning’s press conference, are offered alternative solutions to cutting needed education and health care services by raising $1 billion in revenue, while also protecting the environment.

These ideas include a severance tax, like oil and gas currently pay, for coal mined in the state and an import duty from out of state coal. Imported coal creates zero Texas jobs and pollutes the environment. If we’re going to ask oil and gas to pay a severance tax, we ought to ask coal to do the same.

Other ideas include making polluters pay the value they get from breaking clean air and water laws (ie, if by polluting you increase your profit by $15 million, you pay $15 million in fines), a surcharge on inefficient gas guzzlers and heavily polluting vehicles, and a recycling refund on bottles and cans (just clap your hands, just clap your hands!).

Cutting pollution would also mean fewer sick kids, fewer sick people in general.  Children and the elderly are most at risk for pollution-caused or -aggravated disease AND they are the most likely to receive assistance from government health care services, so cutting pollution will save the state untold millions, if not billions. AND, since sick children are less likely to attend and be successful in school, cutting pollution also improves the quality of our schools– a triple value for our pollution-cutting dollar!

Combine this with former Lt. Governor Hobby calling on the state to end the tax credit on high-cost drilling operations (read: fracking) valued at $7.4 billion between 2004 and 2009.  We had previously pointed out the hypocrisy of making the oil and gas industry’s culture of corporate welfare the only sacred cow in the budget due to their protected status resulting from all their campaign contributions.

Well, between the billions from the fracking exemption, the billion of Green revenue the ACT coalition mentioned… as they say in Washington, “A billion here, a billion there– pretty soon you’re talking about real money.”

Alliance for Clean Texas has a $1 billion check for the Texas Legislature

Alliance for Clean Texas has a $1 billion check for the Texas Legislature

State lawmakers who are serious about balancing the budget without brutalizing our schools, nursing homes, and hospitals ought to look carefully at these proposals and implement them.  Even in the coldest, darkest winter, a farmer cannot start eating his own seed, as it will impact his ability to plant in the spring. Cutting necessary services to the bone and then sucking out the marrow will leave Texas cupboards bare, both literally and figuratively, as we struggle out of this recession.

The answer is simple- cut pollution, not teachers, doctors, and nursing home beds. Don’t let big polluters get their way, forcing grandma out onto the street and your kids into overcrowded classrooms.

The Texas House will be taking up HB 1, the budget, this Friday, and debate is expected to last all day and into the night. Texas Impact, one of our colleagues in ACT, along with several other groups are organizing a vigil for Texas’ future during the debate. RSVP on Facebook and we’ll see you there!

Look! A press release! From today’s press conference! (more…)

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Texas coal-burning power plants – especially those fueled by lignite – could face closures under proposed national standards for coal emissions of mercury and other toxins unveiled by the Environmental Protection Agency.

The standards, which are far tougher than the electric power industry had anticipated, could lead to the shuttering of several coal units in Texas which are currently out of compliance with the new rules.  Can you say “GRANDFATHERED?”

A key issue centers on the “Mercury and Air Toxics Rule,” which the EPA estimates would reduce mercury from power plants by 91 percent, several existing Texas power plants emit so much mercury that a retrofit would not be economically feasible.

Tom “Smitty” Smith, director of Public Citizen Texas, estimated that at least 11 coal units in Texas would likely close if the ruling stands. Retrofitting lignite plants, in particular, could cost between $800 million to $1.2 billion each.

Specifically we believe that Big Brown, Monticello and Martin Lake plants owned by Luminant in East Texas would be on the target list, along with units at American Electric Power, Texas-New Mexico Power and the San Miguel plant outside San Antonio.

NRG Energy Inc., a Houston-based power company, said it’s engaged in a company-wide program to reduce their environmental impact across their existing fleet, coupled with investments in clean and renewable technologies including solar, wind, and the electric vehicle infrastructure. 

In this instance they did not mention their nuclear program or their current license application to expand the South Texas Plant from two units to four units.  But what PR person would given what is happening in Japan?

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Even as the Japanese attempt increasingly frantic tactics to cool an overheated nuclear complex:  

  • U.S. officials warned the situation is deteriorating and challenged the Japanese government’s assessment of the radiation risks telling U.S. civilians and military personnel to stay at least 50 miles from the facility, in contrast to the 12-mile evacuation zone set by Japan.
  • The Nuclear Regulatory Commission Chairman Gregory Jaczko told lawmakers that the U.S. believed the damage at the Fukushima Daiichi nuclear power complex was even graver than Japanese officials had outlined in public; and
  • U.S. Energy Secretary Steven Chu told those same lawmakers that he believed a “partial meltdown” had occurred at the Japanese nuclear power plant and that the accident was “more serious” than the 1979 partial core meltdown at Three Mile Island in Pennsylvania.

In the meantime, Jonathan Silver, executive director of the Energy Department’s loan guarantee program affirmed that it will continue to finance nuclear projects in the United States during a presentation he made today at the Cleantech Forum conference in San Francisco.

Mr. Silver’s remarks followed Congressional testimony in Washington by Energy Secretary Steven Chu and Gregory B. Jaczko, chairman of the Nuclear Regulatory Commission. In the same testimony that cautioned the situation at the Fukushima Dai-ichi plant was more serious than Japanese officials were saying,  Dr. Chu said that the Obama administration continued to support nuclear energy, noting the president had requested that $36 billion be appropriated for the nuclear loan guarantee program.

The loan guarantee program has come under fire from all sides, with Congressional Republicans, questioning whether the department has spent its money wisely and moving to cut funding for the $71 billion program.

An audit released last week by the Energy Department’s inspector general found that poor record-keeping made it difficult to evaluate some loan decisions.  This is especially concerning when considering the high capital cost and high default rate of nuclear projects both here at home and internationally.

NRG’s South Texas Project (STP) proposed expansion near Bay City, TX is high on the list of projects being considered for a federal loan guarantee under this program.  Many of NRG’s financial partners on this project, Toshiba, Tepco (the operators of the doomed Fukushima Dai-ichi plant) and the Japanese government (through loan guarantees)  are probably looking at considerable contraints in being able to make substantial financial investments in projects outside of Japan for the foreseeable future.  Taxpayers should be concerned about issues with loan guarantee program’s ability to adequately assess the risks of their loan decisions.

The U.S. should immediately halt subsidies and instead focus on developing solar and wind power.

Take Action on Nuclear Subsidies

The administration must take off the blinders, look hard at what is going on in Japan and realize that yes, a catastrophe can happen here.

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Investors dumped Japanese shares Monday, sending the Nikkei down 6.2% amid concerns about a nuclear emergency in the country following Friday’s devastating earthquake and tsunami, with stocks of exporters and plant operators hardest hit.

Analysts say stocks were being largely driven by the quake-related news flow; while news of the devastating tsunami effects in northeastern Japan waned.  Fears spread amid the scramble to contain meltdowns at Tokyo Electric Power’s (Tepco) troubled Fukushima Daiichi nuclear plant as investor attention remained riveted on the No. 1 and No. 3 reactors at the facility, which were damaged by the effects of the quake and tsunami. Selling accelerated in the afternoon following a new explosion at the No. 3 reactor, similar to the one that hit the No. 1 reactor on Saturday.

Tepco’s shares went largely untraded, closing down 24 percent. Goldman Sachs also lowered its rating on the stock to Neutral from Buy and cut its target price 13 percent.

Between Tepco and Tohoku Electric Power, some 15 nuclear power units are in questionable status.

Hitachi and Toshiba, which make nuclear power technology, both sank 16 percent.

Why is the economic news of these Japanese companies of interest to Texas?

Nuclear Innovation North America LLC (NINA), the nuclear development company jointly owned by NRG Energy, Inc. and Toshiba Corporation, are the major financial partners in the two new nuclear units at the South Texas Project (STP).  Last year they announced they had reached an agreement with Tokyo Electric Power Company (Tepco), that owns the Fukushima Daiichi, to also partner in the STP expansion.

NINA was also counting on the Japanese government to provide loan guarantees to the project.  So, of the major financial investments in this Texas nuclear expansion, three are Japanese.  One can easily predict that both the Japanese government and Japan’s nuclear industry’s economic future are going to be tied up for the foreseeable future.  Given this, it would be mind-boggling if the U.S. Department of Energy approved a loan guarantee for STP’s expansion.

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The Public Utility Commission (PUC) sunset bill (H.B. 2134) would give the PUC the authority to approve or change the annual budget of the Electric Reliability Council of Texas (ERCOT),  stipulates that no member of the PUC could work for ERCOT for at least two years after he or she had stepped down, and fines would quadruple (from a maximum of $25,000 per day to $100,000 per day) for any company found to have manipulated the electric market for its own gain under the Sunset bill that will be heard in House State Affairs Committee on Monday, March 14th.

Rep. Burt Solomons (R-Carrollton)

State Rep. Burt SolomonsHouse Bill 2134 largely tracks the recommendations approved in January by the Sunset Advisory Commission and includes language that the Carrollton Republican has been advocating for at least two years to cut the number of ERCOT board members who have ties the electric industry.

State Affairs is scheduled to take up the Sunset bill during its hearing that convenes 30 minutes after the House adjourns Monday. The meeting will be held in Room 140 of the Reagan Building northwest of the Capitol.

To see the full text of H.B. 2134, click here.

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