Posts for July 8, 2010

IF AT FIRST YOU DON’T SUCCEED, TRY, TRY AGAIN!!

July 8, 2010 – UMA

Undaunted by wind and rain and snow and cold, the show must go on. Having postponed the 10th Annual UMA Golf Tournament May 24, the UMA staff immediately rescheduled the event for June 25 at Eaglewood Golf Course in North Salt Lake.

Commenting on the cancelled event on May 24, UMA President Tom Bingham, said, “When I got to the Eaglewood Golf Course early that morning, I couldn’t even see the course; it was under a 4 inch blanket of snow. We knew we would need to postpone the annual event, the only question was when to hold it.”

“I worked out an alternative schedule with the pro and turned the weather over to Teresa and plans were underway to use a mulligan to save this the 2010 UMA Golf Tournament,” he said.

Putting Teresa in charge of the weather was a stroke of genius. June 25 was a beautiful day and the tournament went off like clockwork. No complaints about the weather this time.

The double shotgun tournament attracted some 200 golfers from across the state and boasted some very impressive scores in the morning flight. The afternoon flight had a wind to contend with and their scores were a bit higher. Winners for the event are listed below. Congratulations to all who walked away with prizes and a hearty thanks to everyone who supported this annual event for the benefit of the UMA PAC. The UMA PAC exists to assist in electing “business-friendly legislators” in Utah. Under the direction of the Utah Manufacturers Association board of directors, the net proceeds from the annual tournaments are donated to the UMA PAC.

CONTEST WINNERS:
Morning Flight
· 1st Place Morning – Peggy Larsen, Eric Torgersen, Brad Short, Bob Short, Workers Compensation Fund (Score 57)
· 2nd Place Morning – Chris Robinson, Dennis Olsen, Steve Duncan, Randy Sorenson, Boise Paper (Score 58)
· 3rd Place Morning – Barry Macarthur, Scott, Tollerstrup, Dave Stuart, Dave Ricks, Schneider National (Score 60)
· Closest to the Pin Women – Morning – Jana Heyborne, American Pacific Corporation
· Closest to the Pin Men – Morning – Dan Dent, Questar
· Longest Drive Men – Jerry Montanez – Resource Manufacturing
· Longest Drive Women - Keely Draper – Smith Manufacturing

Afternoon Flight
· 1st Place Afternoon - Steve Richards, Lynn Rose- Richards Sheet Metal, Scott Valdez, Bronson Olson, Staples (score – 62)
· 2nd Place Afternoon – Brent Low, Travis Fisher, Jeff Schlindler, Kirk Simmons, Media One (score – 62)
· 3rd Place Afternoon – Dave Martinez, Bryce Castleton, Ryan Smith, Aaron Stewart – Edge Products (score – 62)
· Longest Drive Men - Afternoon – Del Satterthwaite, Olson DataMax
· Closest to the Pin Women - Afternoon –None
· Closest to the Pin Men - Afternoon – Brad Ruesch – Tram Electric

Again, many thanks to all for their great support.

UTAH CONSUMERS, PACIFICORP AGREE TO DUELING ACCOUNTS OVER RECS, POWER COSTS

July 8, 2010 – UAE Weekly Energy Brief
By Jeff Stanfield

PacifiCorp, large energy users and other parties presented Utah regulators with an agreement June 29 to have the utility account for energy costs and renewable energy credit sales receipts.
Following presentations by stakeholders, the Utah Public Service Commission directed the parties to draft an order to set up separate deferred accounts to track both energy purchases and renewable energy credits for later ratemaking treatment.

PacifiCorp wanted the deferred energy cost accounting, but its customers want deferred accounting of revenues recovered by the utility from sales of renewable energy credits.
The utility and its customers have opposing motives.

PacifiCorp, a MidAmerican Energy Holdings Co. subsidiary that serves 779,000 customers in Utah and does business in the state under the name Rocky Mountain Power, wants to set up a pass-through charge to more quickly and thoroughly recover from its customers to cost of merchant power purchases and fuel.

However, the utility's biggest customers want to counter those charges with credits to customers from growing revenues derived from the nonenergy benefits of renewable generation.
On Feb. 8, the commission agreed to consider PacifiCorp's proposed energy cost adjustment mechanism, or ECAM, and any modifications or alternatives that parties might propose. Also, the commission said it would address whether PacifiCorp's ECAM proposal would affect the company's use of natural gas hedging and level of and reliance on market energy.

PacifiCorp immediately asked the commission to allow it to use deferred accounting to keep track of the difference between net power costs allowed in general rates and the utility's actual costs incurred after Feb. 18. Specifically, the utility wants to be allowed to begin deferring "the difference between net power costs ordered in its 2009 General Rate Case and actual power costs incurred on a monthly basis until the commission approves an ECAM." The utility would then use the accounting to recover costs recorded prior to imposition of the ECAM.

On Feb. 22, the Utah Association of Energy Users asked the commission to require deferred accounting of revenues recovered by PacifiCorp from sales of renewable energy credits, including components of renewable energy products bundled with RECs. In this way, the energy users sought to prepare a case for use of deferred REC revenue as a credit to ratepayers in future ratemaking.

The association contended in its application that PacifiCorp is getting windfall profits from RECs as their value continues to increase "in a manner that is dramatic, unprecedented, unforeseeable and extraordinary."

This is due in part to regulatory orders both recent and expected, and the association said PacifiCorp has entered and will continue to enter into RECs sales contracts for which it will be paid much higher prices than the utility has disclosed in its general rate case.
PacifiCorp projected total company REC values of $18.5 million for 12 months ended June 30, but recent testimony filed in Wyoming, where the company also serves customers, included an estimate that total company REC values will be in the range of $84.4 million to $95.2 million for calendar year 2010, the association contended.

Stipulated agreement reached
In a May 4 stipulated agreement, PacifiCorp, its customers and other parties agreed that any party could assert that deferred REC revenues should or should not be applied as a credit to offset deferred net power costs, assuming PacifiCorp's ECAM is ultimately adopted.

With both customers and the utility proposing deferred accounting for their respective interests, the parties struck an agreement to jointly ask the commission to grant both the company motion and the energy users' application.

The stipulation included disavowals that any precedent would be set in the deferred accounting orders or that any presumption would exist regarding the future ratemaking treatment of the deferred amounts.

"Accordingly, by agreeing to issuance of the deferred accounting orders contemplated herein, the parties are not stipulating or agreeing to any facts or legal arguments offered in support of or in opposition to either the Company Motion or the [Utah Association of Energy Users] application," their stipulated motion said.

Rather, the parties were simply agreeing to the rules of engagement. Hearings and deadlines on the substantive aspects of the ECAM dispute were proposed through most of the remaining months of this year. PacifiCorp has been trying to get the cost adjustment for years.

The Utah Industrial Energy Consumers argued that PacifiCorp being allowed to set up a deferred energy account prior to adoption of the ECAM would constitute retroactive ratemaking. PacifiCorp said case law provides for an exception to the retroactive ratemaking rule when actual power costs to be tracked in the account are volatile, large and largely outside the company's control.

Daniel Gimble, special projects manager with the Office of Consumer Services, testified that an ECAM would shift the risks associated with a planning strategy that relied too heavily on market purchases from the company to consumers. Customers would take the risk associated with market price volatility, poor hydro conditions and a quicker recovery of loads from the economic recession than forecast by the company, Gimble said in a June 29 errata filing to his direct testimony of June 16.

RETAILERS POST SLUGGISH RESULTS IN JUNE

July 8, 2010 – Today in Manufacturing.net

The lackluster performance, being compared with a weak June 2009, is raising concerns about the back-to-school shopping season and health of the economic recovery... continue

TRANSPORT RULE AIMS TO ACHIEVE MORE EMISSIONS REDUCTIONS SOONER THAN CAIR

July 8, 2010 – UAE Energy Weekly Brief
By Jennifer Zajac

The U.S. Environmental Protection Agency has proposed to revise the George W. Bush administration's Clean Air Interstate Rule in a way that would achieve greater emissions reductions, and sooner than required by the original rule before it was vacated by a federal court, to ensure that downwind states can meet clean air requirements.

"Yesterday, most of the East Coast had pretty lousy ozone days. What this is attempting to do is give people cleaner air to breathe," said Gina McCarthy, EPA's assistant administrator for air and radiation, when asked to explain in layman's terms the proposed Clean Air Transport Rule during a July 6 media conference call.

The proposed rule would regulate the amount of emissions from electric generation units for all of the eastern United States and extend as far as Texas and Oklahoma. It would have a "very minimal impact on the electricity prices moving forward because it is done in as flexible a way as the law allows in using the most cost-effective mechanisms available," McCarthy said.
All fossil-fueled electric generation facilities would be subject to the proposed regulations. McCarthy said the agency has not estimated whether any coal plants would be shuttered as a direct result of the transport rule.

The U.S. Environmental Protection Agency on July 6 proposed new regulations to curb SO2 and NOx power plant emissions in 31 states and Washington, D.C. The proposed rule will carry an annual cost of compliance of $2.8 billion in 2014, the EPA estimated.

The proposal, dubbed the transport rule, would reduce power plant emissions of SO2 and NOx to meet state-by-state emission reductions. By 2014, the rule, along with other state and EPA actions, would reduce SO2 emissions by 71% over 2005 levels and NOx emissions by 52%.
The EPA said the reductions will be accomplished by existing pollution control technologies. The proposal aims to replace and improve on the Clean Air Interstate Rule, which was vacated in July 2008 by the U.S. Court of Appeals for the District of Columbia Circuit. The court said the rule was fatally flawed and ordered the EPA back to the drawing board to revise the rule.
"This rule is designed to cut pollution that spreads hundreds of miles and has enormous negative impacts on millions of Americans," EPA Administrator Lisa Jackson said in a news release. "We're working to limit pollution at its source, rather than waiting for it to move across the country. The reductions we're proposing will save billions in health costs, help increase American educational and economic productivity, and — most importantly — save lives."

How transport rule compares to CAIR
The stricter rules announced July 6 are expected to curb SO2 and NOx power plant emissions in 31 states and Washington, D.C., at an estimated annual cost of $2.8 billion. To take effect in 2014, the proposed rule, along with other state and EPA actions, would reduce SO2 emissions by 71% over 2005 levels and NOx emissions by 52%.

The proposed rule was submitted to the Office of Management and Budget on April 26 for regulatory review and was signed July 6 by EPA Administrator Lisa Jackson. The agency added three states to its list of states that are required to meet CAIR standards: Nebraska, Oklahoma and Kansas. The requirements on states vary because the agency has "looked at upwind contribution in a more substantial way," McCarthy said.

As expected, the replacement version of CAIR includes a hybrid of interstate and intrastate trading. The proposal gives states some flexibility to exceed their allocated annual emissions budget with the understanding that they will need to purchase additional allowances in the system, according to McCarthy. The rule also provides a 10% "buffer," but states that exceed their allocations by more than 10% would face "significant penalties." Any unit that is responsible for that excess amount would be required to pay for the excess allowances in the system.

McCarthy said the proposed rule also will impact CO2 emissions, although that is not the intent of the proposal. She added that the transport rule "needs to be looked at in combination with future rulemakings, like the utility [maximum achievable control technology] standard, and we'll have those discussions as we move forward."

Additional NOx reductions will be needed, particularly beyond 2014, McCarthy said. Several other rules that impact electric utilities will be issued in the months to come: the ozone National Ambient Air Quality Standards reconsideration is expected to be released in August; the utility boiler New Source Performance Standards and MACT proposed rules are expected in March 2011, with a final rule in November 2011; additional NOx reductions requirements are expected to be proposed in summer 2011, with a final rule to be issued a year later; and a particulate matter NAAQS proposal is due February 2011, with a final rule in October 2011, according to McCarthy.

"It's not the final answer, but it certainly locks in the CAIR reductions. We believe it does it in a way that's consistent with the direction of the court so it will withstand legal scrutiny," McCarthy said in the July 6 media conference call. "I would say it's very cost effective in terms of costs and benefits, but it also lays out the challenges before us. It doesn't claim to have long-term answers, but it does claim to try and address the issues in a very robust and straightforward and environmentally sound way."

ClearView Energy Partners LLC analyst Kevin Book said in a July 6 research note: "NOx and SO2 may give the Administration more near-term leverage over utilities' fuel choices and the political decisions of the lawmakers that represent them than [greenhouse gas] rules, a vital catalyst for Congressional action. On the other hand, the pinch on generators may not seem as grim as it could get until the second stage of the Transport Rule is finalized to reflect further NAAQS revisions next year, making today's cap-without-much-trading proposal more of a heads-up than a call-to-arms, and probably an insufficiently strong driver of climate legislation in the face of the many political obstacles we have enumerated in the past."

EPA assumes that the final transport rule will be legally challenged, as are most major rules, but McCarthy stressed that the time to challenge the proposed rule is now, before it becomes final.

Carper, McCarthy on Carper-Alexander
When asked how the proposed transport rule compares to the Clean Air Act Amendments of 2010, proposed by Sens. Tom Carper, D-Del., and Lamar Alexander, R-Tenn., McCarthy said the proposed rule is a work in progress and does not compare directly to Carper's long-term intentions for emission reductions. The Carper-Alexander proposal is designed to cut mercury emissions from coal plants 90% by 2015 and reduce SO2 emissions by 80%, to 1.5 million tons in 2018 from 7.6 million tons in 2008, while also cutting NOx emissions by 53%, to 1.6 million tons in 2015 from 3 million tons in 2008.

"There's no doubt the new rule will help clean the air. Unfortunately, for the EPA to meet previous court rulings, the regulation is complicated and open to further lawsuits, which would likely cause even more delays in meeting our public health targets," Carper said in a July 6 statement. "For me, and I hope for my colleagues, today's transport rule underscores the need for Congress to step up to the plate and pass legislation that adequately addresses this complex and critical issue. … My bill, which has broad bipartisan support with 15 cosponsors, would set even greater reductions than what EPA has put forth today, while at the same time giving flexibility to businesses and states to meet those targets."

Book said in his research note: "We reiterate low odds for 2010 House-Senate agreement on a utility-only cap-and-trade bill for greenhouse gas (GHG) emissions, even as a basis for a 'multi-pollutant' regime governing NOx, SO2 and mercury, owing to all of the challenges we have highlighted in the past (politics, calendar, etc.). That said, we do think a second-phase Transport Rule that tightens NOx targets next summer could provide a catalyst for 2011 passage of a multi-pollutant bill (potentially including GHG), particularly if November election outcomes moderate the leadership of the Senate Environment and Public Works Committee."

CAIR overturned, restored, revised
CAIR was overturned by the U.S. Court of Appeals for the District of Columbia Circuit in July 2008 and would have established a new federal emissions trading program. In its 2008 ruling, the court said the original CAIR did not allocate SO2 allowances in an equal manner to the 28 mostly eastern U.S. states (and the District of Columbia) covered by the rule. Under CAIR, the agency gave each state SO2 allowances that were a fraction of those that had been allocated under a previous cap-and-trade program for SO2 established pursuant to the Clean Air Act's acid rain program. Specifically, the 28 CAIR states saw their SO2 budgets slashed to 50% of the levels permitted under the acid rain program in 2010, and to 35% of those previously established levels for 2015.

The appeals court also faulted EPA for trying to "harmonize" CAIR's regulation of SO2 with the existing program for trading SO2 emissions allowances by devising a plan for retiring excess SO2 allowances. Under the old SO2 trading system, companies surrendered one allowance for every ton of emissions, but CAIR escalated the surrender rate by requiring emitters to surrender two allowances for every ton of emissions beginning in 2010, and 2.86 allowances for every ton of SO2 beginning in 2015. The appeals court concluded that EPA did not have the authority to impose such a retirement plan. The rule was temporarily restored in late 2008 while EPA reworked the rule.

The comment period will be 60 days from the time the proposal is published in the Federal Register. EPA will hold three public hearings that have yet to be determined, which will be announced in a separate Federal Register notice.

JANICKI INDUSTRIES IS ANCHOR TENANT FOR LAYTON'S EAST GATE DEVELOPMENT

July 8, 2010 – UB Daily

Commercial Realtor NAI Utah announced that it has finalized a lease agreement with aerospace manufacturer Janicki Industries as the anchor tenant for JL Properties Inc.’s new East Gate development. The East Gate Development is located in Layton City, east and adjacent to, Hill Air Force Base.
View Full Article

OBAMA'S EXPORT GOALS FACE TOUGH OBSTACLES

July 8, 2010 – Today in Manufacturing.net

A fading economic recovery, Europe’s debt crisis, and manufacturing's shift to low-cost nations are all hurdles that hinder Obama's goal of doubling exports in next five years... continue

HARNESSING, USING THE POWER OF WIND THROUGHOUT THE WEST

OUR VIEW Sunday, July 04, 2010 - Oregonian

July 8, 2010 – UAE Weekly Energy Brief

Wind. It blows hard up the Columbia River and across the wheat fields of northeast Oregon. Gales whip down out of the Rockies and over the plains of eastern Montana. And they blast the high passes of Wyoming with almost constant motion.

Ranchers, farmers, motorists traveling the interstate highways and professional weather forecasters can all attest that certain parts of the West are prone to sustained and frequent winds.

Environmentalists and energy companies have noticed, too. The former speak often of harnessing "clean, renewable, wind energy" to power our homes and industry. Wind, most say, is the perfect alternative to burning coal, natural gas or other polluting carbon fuels.

This message has been heard and believed. Hundreds of wind turbines have gone up along the Columbia and Eastern Oregon, in Montana and, especially, in southeastern Wyoming. Many more of these "wind farms" are being planned or are under construction.

Pacific Power President R. Patrick Reiten says his company is a believer in wind energy. During a recent stop in Pendleton to celebrate the company's centennial, he said Pacific Power is expecting to shift from 76 percent of its generated power coming from coal to 56 percent over the next 10 years or so. Part of this downshift will come from increasing wind-generating capacity. "We are going hard into wind power," he said.

The problem with wind, however, is that it is "nondependable," says Reiten. Apologizing for this inside the power industry word, he said this simply means one cannot depend on the wind blowing when the energy is most needed at peak times. There is, however, one way to make it more dependable.

The simple fact of weather is that storms tend to move from West to East. The wind may not be blowing today along the Columbia River, but if not, it is likely to be blowing in Montana or Wyoming. For sure, it is usually blowing in one of those wind farm states.

If the power generated by the big wind turbines can be moved across the West via an integrated power grid, Reiten reasons, then wind power can become much more reliable and a larger part of satisfying energy needs in Oregon and other states.

This is the reason Pacific Power has signed a memorandum of understanding to join with Idaho Power in building nearly 1,150 miles of high voltage transmission lines from Wyoming to southern Idaho. This project is part of the company's Gateway West Transmission Line Project that ultimately will connect a 500 kilovolt line from Boardman to the proposed Hemingway substation south of Boise. The combination of all this new transmission capacity will enable wind, and other types of power, to move across the states more efficiently.

Reiten says the lines will have the positive result of lowering the cost of generating wind power by making it more reliable and, thus, reducing the need to assure peaking capacity from more traditional generating sources.

Right now, extra coal or natural gas capacity must be at the ready for days when the wind does not blow in Oregon. Those days are often hot and calm. But if the wind is blowing in Montana, this wind power can be moved here. The reverse is also true as different regions of the West tend to demand peak power at different times.

Then there are the days when the turbines must actually be shut down, even with strong wind blowing, because the transmission grid can't handle all the power that would be generated.

A group of governors meeting in Montana this week seconded Reiten's comments. The governors agreed that new transmission lines are critical in developing alternative electricity production. Montana Gov. Brian Schweitzer said there won't be much more new energy development without new lines.

"We don't develop any of the alternative sources until you get transmission," he said. 'You can't put electricity in a bottle and send it down the river."

Pacific Power does not have new wind farms planned for Oregon. Reiten says the best place for wind power expansion is in Wyoming for his company. Others, however, may build here.

It will be hard to argue that new high voltage power lines are pretty. Most people will find them ugly and some will object to locating them on public or private land. Still, it is clear that the new transmission capacity and lines are needed.

The pretty side of the ugly lines will be that they will encourage expanded development of wind power.

INITIAL JOBLESS CLAIMS DROP SHARPLY

July 8, 2010 – Today in Manufacturing.net

Requests for jobless aid dropped by 21,000 to a seasonally adjusted 454,000 -- the lowest level since early May and erasing the increases of the last two months... continue

CHINA TO KEEP YUAN 'STABLE'

July 8, 2010 – Today in Manufacturing.net

Beijing will keep yuan at a 'basically stable and reasonable' level as financial pressure for yuan to rise eases due to Europe's debt woes, China's foreign exchange regulator said... continue

CONGRESSIONAL BUDGET OFFICE FINDS THAT KERRY-LIEBERMAN CLIMATE BILL CUTS DEFICIT $19B

July 8, 2010 – UAE Weekly Energy Brief
By Kathleen Hart

Sens. John Kerry, D-Mass., and Joe Lieberman, I-Conn., co-authors of comprehensive energy and climate change legislation in the Senate, released a Congressional Budget Office scoring of their bill, the American Power Act, which concludes that it would reduce the U.S. budget by more than $19 billion over 10 years.

"Today, the Congressional Budget Office has sent Congress a powerful message: our comprehensive energy and climate bill will slash America's deficit by over $19 billion," the senators said in a July 7 news release. "There is no more room for excuses — this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon. Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative which reduces it."

The CBO estimated that enacting the Senate bill would increase revenues by about $751 billion in the 2011-2020 period and direct spending by $732 billion. In total, the legislation would reduce future deficits by about $19 billion over the period. Enacting the legislation would not increase the deficit in any of the four 10-year periods following 2020 because additional direct spending would be less than the additional net revenues attributable to the legislation, the CBO added.

Under the Kerry-Lieberman cap-and-trade bill, the EPA would issue emissions allowances, some of which would be auctioned by the federal government, with the remainder distributed to states, federal agencies, natural gas distributors and local distribution companies at no charge. The CBO noted that a portion of an entity's compliance obligation under the cap-and-trade program could be met by purchasing domestic or international offsets in lieu of an allowance.

The legislation would provide tax credits, cash rebates or rebates on utility bills to lessen the impact on consumers or households of higher prices that would result from the cap-and-trade programs. It also would provide various financial incentives to increase generation of electricity from nuclear power and establish a Carbon Storage Research Corp. to support research and development of technologies related to carbon capture and sequestration. In addition, the bill would authorize federal receipts from Outer Continental Shelf oil and natural gas leasing activities to be shared with certain coastal states.