Marlo Lewis

Post image for Market Speaks: Impacts of EPA Train Wreck Will Be Much Higher Than Anticipated

Market Speaks: Impacts of EPA Train Wreck Will Be Much Higher Than Anticipated

by Marlo Lewis on June 2, 2011

in Features

PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia. My colleage, Troutman Sanders attorney Peter Glaser, just sent around a memo on the impacts of EPA’s regulatory surge on electricity prices. The memo is based on PJM auction reports (here and here).

Peter’s memo is too juicy not to share with a wider audience. I reproduce it below with his permission. — Marlo 

Reality has interceded in EPA’s attempt to play down the impact of its train wreck regulations on the electric utility industry.  First came the widely reported news that Louisville Gas & Electric had filed for a 19% rate increase by 2016 to pay for the upgrades that the regulations will require.
 
Now, we have the results of the capacity auction that PJM just conducted for the 2014-15 capacity year.  The resulting capacity prices were about 4.5 to 8 times as high as prices paid in the last two auctions and 2.5 to 3 times as high as market analysts had predicted. 
 
According to PJM, most of this increase can be laid at the feet of EPA.  Based on PJM information, we calculate that the portion of the increase attributable to EPA will cost load (customers) in the PJM region $2-3 billion just in capacity costs and just for a one-year period (2014-15).  
 
Here are the details.

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Post image for Global Warming Has No Significant Impact on Disaster Losses, Study Finds

Global Warming Has No Significant Impact on Disaster Losses, Study Finds

by Marlo Lewis on June 1, 2011

in Features

Al Gore’s film An Inconvenient Truth bombarded audiences with image after image of hurricanes, tornadoes, floods, forest fires, and drought, creating the impression of a world in climate chaos. Gore blamed the alleged upsurge in extreme weather on global warming, that is, mankind’s sins of emission. One of Gore’s mighty pieces of evidence was a dramatic increase in insurance payments for weather-related damages. As he writes in his best-selling book of the same title:

Over the last three decades, insurance companies have seen a 15-fold increase in the amount of money paid to victims of extreme weather. Hurricanes, floods, drought, tornadoes, wildfires and other natural disasters have caused these losses [An Inconvenient Truth, p. 101].

Gore presented a chart similar to this one:

Seeing is believing, right? The problem, of course, is not merely that correlation (warmer weather/bigger losses) does not prove causation. More importantly, the economic data depicted in the chart have not been adjusted (“normalized”) to offset increases in population, wealth, and the consumer price index.

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What Should Drive Fuel Efficiency?

by Marlo Lewis on May 31, 2011

in Blog, Features

Post image for What Should Drive Fuel Efficiency?

What should drive fuel efficiency? Select the answer you think is correct: 

(a) Government;

(b) Markets; or

(c) Please pass the sweet and sour shrimp.

If you chose (a), then go straight to www.allsp.com (Season 10) and watch my favorite South Park episode, “Smug Alert.”

If you chose (c), then you’re on your way to a promising career as a diplomat.

Today, on National Journal’s energy blog, I explain why the correct answer is (b).

Post image for Court to EPA: Horsefeathers!

Court to EPA: Horsefeathers!

by Marlo Lewis on May 27, 2011

in Features

Okay, maybe I was wrong. Just because the Supreme Court in Massachusetts v. EPA legislated from the bench in order to empower EPA to legislate from the bureau does not necessarily mean that lower courts will tolerate similar breaches of the separation of powers.

Yesterday (May 26, 2011), in Avenal Power Center v. EPA, District of Columbia Judge Richard Leon mockingly rejected EPA’s arguments for attempting to amend the Clean Air Act to suit the agency’s administrative convenience. Although not mentioned by him, Judge Leon’s reasoning may strengthen legal challenges to EPA’s greenhouse gas Tailoring Rule.

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About Those Big Bad Oil Companies . . .

by Marlo Lewis on May 26, 2011

in Blog, Features

Post image for About Those Big Bad Oil Companies . . .

On May 17, the Senate voted 52-48 for S. 940, the Close Big Oil Tax Loopholes Act, sponsored by Sen. Robert Menendez (D-N.J.). The bill would selectively hike taxes on the nation’s five largest oil companies (Chevron, Shell, BP America, Conoco Phillips, and ExxonMobil).

The bill failed of passage, falling eight votes short of the 60 required to overcome a filibuster.

But that was just one skirmish in the protracted political war against U.S. energy production. A majority of Senators voted for the bill and gasoline prices could hit new highs in the summer driving season. So expect more anti-oil demagoguery from the World’s Greatest Deliberative Body in the very near future.

Demagogues feed and exploit public ignorance and frustration. Nobody likes paying $4.00 a gallon for gas, and self-styled progressive politicians, pundits, and activists claim Big Oil is “price gouging,” reaping “windfall profits,” and not paying their “fair share” of taxes. They claim we’d all feel less pain at the pump if Big Oil felt more pain on April 15. This popular narrative has no basis in fact or economic logic. [click to continue…]

Next Generation Fuel Economy Sticker – To Boldly Label What No Agency Has Labeled Before

by Marlo Lewis on May 25, 2011

in Blog, Features

Post image for Next Generation Fuel Economy Sticker – To Boldly Label What No Agency Has Labeled Before

Today, the U.S. EPA and the National Highway Traffic Safety Administration (NHTSA) proudly unveil their new, improved, long-awaited, supah-dupah, “next generation” fuel economy sticker. All model year 2013 vehicles will have to display the redesigned stickers.

“The new labels, which are the most dramatic overhaul to fuel economy labels since the program began more than 30 years ago, will provide more comprehensive fuel efficiency information, including estimated annual fuel costs, savings, as well as information on each vehicle’s environmental impact,” EPA’s press releaseenthuses. Only in the makework world of bureaucracy central would this “overhaul” of a label be hailed as “dramatic.”

As my colleague William Yeatman joked when I told him the news: “Anyone can have a sticker, but a next generation sticker — the future is here, my friend!”

In their original August 2010 regulatory proposal, the agencies wanted the new label to include letter grades based on the car’s fuel economy and carbon dioxide (CO2) emissions. Electric vehicles and plug-in hybrids would get an A+; the biggest, heaviest, gas guzzling SUVs would get a D.

However, in December 2010, 53 House Members sent a bipartisan letter to EPA Administrator Lisa Jackson and DOT Secretary Ray LaHood protesting that letter grades would “unfairly promote certain vehicles over others.” Indeed, that was the point. Stigmatize SUVs and other politically-incorrect vehicles by giving them bad grades.

Worse, grading cars implicitly means grading the people who buy them. People who buy cars with super-low or zero emissions are caring and ahead of the curve. Those who buy gas guzzlers are yokels who voted for Bush and wear baseball caps in restaurants. The South Park spoof on the “Toyonda Pius,” Smug Alert, all-too-accurately depicts the greener-than-thou pretension of EPA and NHTSA’s proposed grading system.

Rebuked by those wielding the power of the purse, the agencies relented and the “next generation” sticker does not include letter grades. To view the current sticker, click here. To see what the scolds at EPA and NHTSA originally planned to replace it with, click here.

Clearly, these folks are into behavior modification. How potent will the redesigned label be in modifying your behavior? [click to continue…]

Post image for Snowpack — Shrinking Or Growing?

Snowpack — Shrinking Or Growing?

by Marlo Lewis on May 24, 2011

in Blog, Features

A staple of climate alarmism is the claim that snow pack in the arid West is shrinking and melting earlier in the spring season, diminishing supplies of water needed for irrigated agriculture in the hot summer months. But this year, snow pack is at record highs. Indeed, snow is piled so high that the big worry is not about summer drought but flash floods.

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Post image for UK Power Pylon Competition Will Raise Consciousness

UK Power Pylon Competition Will Raise Consciousness

by Marlo Lewis on May 23, 2011

in Features

 “The UK’s National Grid has launched a competition to design the electricity pylons of the future that will carry green electricity from onshore and offshore wind farms, and other power sources, to the consumer,” Power-Gen Worldwide reports. The winning architect, designer, engineer, or student of those disciplines will receive a £10,000 ($16,131) prize. The public will be invited to comment on the final contestants in September, and an expert panel will select the winner in October. 

Both the competition and the design selected are intended to raise consciousness. From the article: [click to continue…]

Cap-and-Trade Setback In California

by Marlo Lewis on May 22, 2011

in Blog, Features

Post image for Cap-and-Trade Setback In California

California Superior Court judge Ernest Goldsmith ruled on Friday that the state’s Air Resources Board (ARB) must halt “any futher rulemaking and implementation of cap-and-trade” until the agency examines alternatives policies to meet the greenhouse gas-reduction targets established by Assembly Bill 32, the Global Warming Solutions Act. ARB must also, pursuant to the California Environmental Quality Act (CEQA), complete a review of the environmental impacts of its preferred regulatory strategy before adopting it.

Note: The ruling does not challenge AB 32 itself, and petitioners in the case are greenies who think ARB’s plan to curb greenhouse gas (GHG) emissions doesn’t go far enough. Nonetheless, this is a setback to California politicians and cap-and-taxers throughout the land. ARB has 15 months to provide the requisite analyses. ARB says it will appeal the decision. Rots of ruck! [click to continue…]

Post image for Trick-Question Poll ‘Finds’ Upton’s Constituents Want EPA To Regulate Greenhouse Gases

Trick-Question Poll ‘Finds’ Upton’s Constituents Want EPA To Regulate Greenhouse Gases

by Marlo Lewis on May 20, 2011

in Blog, Features

The Natural Resources Defense Council (NRDC) Action Fund commissioned a poll from a Democratic pollster finding that voters in Rep. Fred Upton’s district disapprove of the GOP congressman’s efforts to overturn EPA’s climate change regulations. Hold the presses! Man bites dog! I mean, what are the odds that a poll conducted by Public Policy Polling and commissioned by NRDC would reach that conclusion?

Actually, what’s surprising is that Greenwire (May 19, 2011, subscription required) would bother covering the NRDC poll as if it were news. [click to continue…]

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