John Locke Update / Research Newsletter

Perdue pressures utilities to buy wind power from Spanish company

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This weekly newsletter, focused on environmental issues, highlights relevant analysis done by the John Locke Foundation and other think tanks, as well as items in the news.

1. Perdue pressures utilities to buy wind power from Spanish company

The Civitas Institute features an excellent article today exposing an apparent campaign by North Carolina’s Governor Beverly Perdue to pressure Duke Power, Dominion Power, and Progress Energy to agree to buy wind-generated electricity that they have already determined to be too expensive and turned down. The issue involves a proposed industrial wind turbine power plant to be built by a Spanish company, Iberdrola Renewables, near Elizabeth City. The company will be receiving $200 million in federal subsidies plus additional subsidies from the state of North Carolina.

The only hitch is that the project needs customers, and Iberdrola won’t start the project unless the state utilities agree to buy their electricity. Since North Carolina passed its renewable portfolio standard in 2007 (SB3), which forces the utilities to provide 7.5 percent of their electricity from renewable sources (and for electricity customers to pay for it), this deal should be a slam dunk for Iberdrola. Apparently the prices Iberdrola wants to charge are out of line with even the typically outrageous costs of wind power.

As Brian Balfour of Civitas explains:

… in order for the new Desert Wind Power Project to be a "long-term success," Iberdrola is counting on a $200 million federal subsidy to help finance the $600 million project. In order to be eligible for this handout, Iberdrola needs to begin work on the project before the end of this calendar year. Without an agreement from a large utility company to purchase the energy generated by the wind farm, however, Iberdrola will not proceed with construction.

When the state’s utilities turned down their offer as being too expensive, Gov. Perdue inserted herself into the process — not on the side of lower rates and North Carolina’s utility customers, but on the side of the Spanish corporation (the one percent, if you will). In a letter to the utilities, Perdue states "I urge you to give serious consideration to partnering with Iberdrola Renewables to make the Project a reality."

Apparently, there has not been a similar letter sent to Iberdrola suggesting that they charge the utilities a more reasonable rate for their electricity in order to strike an agreement.

For more details on the inefficiencies and environmental harms associated with wind power, be sure to watch this video of the wind power workshop sponsored by the John Locke Foundation earlier this month in Wilmington.

2. Kudos to Canada

Canada is the first country to kiss the Kyoto Protocol on climate change goodbye. As noted by India Today, Canada’s withdrawal "has happened within days of the world reaching an agreement at the Durban climate conference on the extension of the Kyoto Protocol," which has "dealt a blow to the Durban deal."

Peter Kent, the Canadian environmental minister, stated that "it’s now clear that Kyoto is not the path forward to a global solution to climate change. If anything it’s an impediment." One of the reasons Kent cited is that neither the U.S. nor China is part of the agreement. The United State’s involvement in the treaty was squelched back in 1997, when the U.S. Senate voted almost unanimously to reject the treaty.

3. Has the EPA rigged a "fracking" study to show dangers where none exist?

Such is the claim in a Fiscal Times article:

… the EPA says tests it conducted in Pavillion, Wyoming "indicate that ground water in the aquifer contains compounds likely associated with gas production practices, including hydraulic fracturing." However, it turns out that the EPA drilled two monitoring wells to some 900 feet — much deeper than water wells which are usually at about 300 feet — and indeed found hydrocarbons. In short, they drilled into the natural gas reservoir.

This will be an important story to follow given that North Carolina is considering the possibility of allowing the drilling for natural gas using the "fracking" technique.

Click here for the Environmental Update archive.

 

Roy Cordato is Senior Economist and Resident Scholar at the John Locke Foundation. From January 2001 to March 2017, he held the position of Vice President for Research at the Locke Foundation. He also holds the title of Lecturer at… ...

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