Posted on 09/19/2002 5:24:39 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
If American Electric Power moves forward with plans to close its three Corpus Christi power plants, it won't go _unnoticed.
The three power plants alone paid more than $1.5 million last year in property taxes to local taxing agencies and schools. About 90 people would lose their jobs.
And the most valuable plant, Barney Davis in Flour Bluff, houses a state fish hatchery; it is the hope of city officials who want to build a desalination plant there.
"It's all negative,'' said City Councilman Mark Scott,, who represents Flour Bluff. "I would hope that we vigorously oppose closing that plant.''
AEP announced last week its plans to mothball 16 power plants in Texas. Those include the Barney Davis plant on Waldron Road, the Lon C. Hill plant in Calallen, and the Nueces Bay plant on Nueces Bay Boulevard near the ship channel.
The Columbus, Ohio-based company has asked the Electric Reliability Council of Texas if it can safely close the plants without compromising the state's ability to provide power.
All three Corpus Christi plants are natural-gas fired. Nueces Bay is more than 50 years old, and Lon Hill is nearly 50 years old. Barney Davis in Flour Bluff was built in 1974.
An AEP spokesman has said all three use older technology that is being surpassed by newer, more efficient plants built elsewhere in the state.
Desalination potential
But several local people are pinning their hopes on Barney Davis for more than just power.
City Manager David Garcia said he has told AEP officials locally that the city has a strong interest in using the plant to turn salt water into drinking water for the state of Texas. He said the city has been putting together a response to a state request for proposals to build such a plant, and he envisions it pumping out 500 million gallons of clean water per day.
The city also is looking at Padre Island for a possible 4-million-gallon-per-day desalination plant to be built in the next 18 to 24 months.
Garcia said he's not only worried about the possibility of a shuttered Barney Davis ruining the city's hopes, but also about the effect on electricity prices.
With less generation, municipalities and consumers are worried that prices would escalate, although AEP has said the closures won't affect prices.
"This is a big deal for us,'' Garcia said, adding that the city estimates saving $1 million this year on utility bills. Much of the savings have been in electricity prices because the city negotiated lower rates under deregulation.
He said he plans to relay his concerns to the Public Utility Commission.
Home to fish hatchery
The Barney Davis plant also is the home of a Texas Parks and Wildlife fish hatchery.
AEP promoted the hatchery as part of its commitment to the environment.
The company lets the state use the land for the Coastal Conservation Association/American Electric Power Marine Development Center, which produces between 4 million and 10 million redfish and spotted trout released into the state's bays, including the Laguna Madre.
The development center raises about half of the speckled trout produced by Parks and Wildlife hatcheries, said biologist Robert Adami.
"We don't have any idea what's going to happen,'' he said.
He estimated the state has put upward of $10 million into investment in the hatchery. The marine development center uses warm water released from the plant during the winter months.
Several people who live near the Barney Davis plant aren't so sure what the plant's closing will mean for them, either.
"I would rather it stay open,'' said Kimberley Fergel, 29, who worried the plant's closing would mean higher electricity prices.
Tate Adams, 31, who can see the plant from his front door, also had his worries.
"Are they going to disassemble it or are they going to just let it rot away?'' he said.
District's largest taxpayer
Neighbors reported that living near the plant was mostly uneventful, aside from the occasional high-pitched screeching sound and the infrequent plume of gray smoke from the smokestacks.
But the closing of the plants will mean something for the cash coffers of the local school districts. The Barney Davis plant was valued at $22.6 million, and it paid $714,365 in local property taxes last year. Central Power and Light, now a separate entity from AEP, was listed as the taxpayer for the Nueces County Appraisal District.
The Barney Davis plant paid the Flour Bluff Independent School District $363,653 last year in taxes, according to the county's tax office. CPL also pays taxes on transmission lines and fuel and is the largest taxpayer for the school district.
Flour Bluff ISD's superintendent for business, Xavier Gonzalez, said the plant's closing would have an effect on the school district, although not dramatic. If the plant closed, it would diminish in value and pay fewer taxes.
But Gonzalez said most of the district's taxes, 75 percent to 80 percent, come from residential property.
Loss of funds, students
Susan Ebert, the director of finance for Calallen Independent School District, said the loss of its $231,261 tax payment from the Lon C. Hill plant would hurt for about a year, before the state made up for the loss in its own check to the district.
CPL is the district's second largest taxpayer, after Equistar.
"The problem is the loss is more than just that value,'' she said.
Ebert said with declining enrollment, the district didn't need to lose any more students if their parents were laid off from work and left town.
Contact Naomi Snyder at 886-4316 or snydern@caller.com
Can't blame AEP for wanting to shut down older, inefficient power plants, but it sure would have a negative effect on the local community. (And 16 plants shutting down throughout Texas is the loss of a LOT of generating capacity)
It would be nice if the Barney Davis plant were salvaged for use with the proposed desalination facility, especially if that could be constructed without interference with the fish hatchery operation.
Longer term, it would be nice if power generation were converted to nuclear technology to support nuclear desalination. Natural gas is relatively inexpensive and clean burning. But its use is better suited for widespread pipeline distribution for myriad other uses: industrial, commercial and residential.
Concern over fresh water supply is becoming increasingly common in our nation due to pressures from drought and population growth. Our coastal states are frequently evaluating the viability of desalination systems to provide their fresh water needs. Desalination is an energy intensive process, so it is quite common for these facilities to be built in close proximity to electric power plants. For this reason, it is also reasonable to consider the use of nuclear desalination as a potential option.
The same owner will still pay taxes.
It's just that a closed/mothballed plant drops significantly in value, and the taxes they pay drop simultaneously.
Texas' electrical utility industry is the most/best deregulated electrical utility in the nation. This is how deregulation should work, weed out the inefficent units ( which are often the worst polluters) and lower the cost for consumers.
California, Enron and other incompetent crooks have ruined the promise of deregulation for the rest of us.
Using the old plant for desalination is an excellent idea that would eventually be very profitable.
A decrease in supply leads to an increase in price to consumers.
Energy Market May Lead to Mothballing of 16 AEP Texas Plants
- LCG, September 12, 2002-American Electric Power, or AEP, may mothball as many as 16 of its Texas power plants in order to ease its financial situation.
- The plants, all of which are gas-fired, are located within the Electric Reliability Council of Texas (ERCOT). ERCOT will determine which plants are RMR, or "reliability must run," and the remaining, less-than-vital plants will be pulled off line by the end of this year.
- AEP officials say the mothballing is in response to deregulation-related growth in the Texas power industry, which has pushed wholesale electricity prices below AEP production costs. Plant employees affected by mothballing will reportedly assume inactive status and receive severance pay.
- The sixteen plants in question, representing some 2,663 megawatts of capacity, are Abilene, B.M. Davis, E.S. Joslin, Fort Phantom, Fort Stockton, J.L. Bates, La Palma, Lake Pauline, Laredo, Lon C. Hill, Nueces Bay, Oak Creek, Paint Creek, Rio Pecos, San Angelo, and Victoria.
That's very likely true, considering that 2 of the 3 Corpus Christi plants are 50 years old and the third is pushing 28.
(I gotta admit, I'm somewhat surprised the plants couldn't be retrofit with more efficient equipment, especially considering that they're gas fired. I can understand how coal-fired plants would be a lot more difficult to upgrade.)
Just the same, loss of this generating capacity, inefficient as it may be, is likely to lead to higher prices to consumers due to less competition. I would also expect the entire grid to be less capable of coping with demand peaks or unscheduled outages of plants that remain in operation. It's the predictable outcome of having less unused capacity available.
The we could seriously export some energy as needed.
A decrease in supply leads to an increase in price to consumers.
Not as long as sufficent supply exists to meet the demand.
Texas Utilities have built a lot of new plants in recent years. Now they are weeding out the old and weak, this is just survival of the fittest at work.
Not in government protected monopolies such as electric power supply. Regulated rates are calculated on a cost-plus basis.
This ain't California.
Austin, TX, March 14, 2001
-- Texas electric customers looking for lower rates can take advantage of unprecedented growth in the state's generation capacity.
The annual ERCOT Wholesale Market Report scheduled for release this week by the Public Utility Commission (PUC) reports an increase of 10 new power plants since a previous update in February. This reflects 27 completed plants since 1995, 27 more currently under construction and 31 in the planning stages. These plants put Texas in the enviable position of having a 23 percent excess power margin for the coming summer peak. A map and table of the updated information are attached.
Projects Completed in Texas since 1995.
Map of New Electric Generating Plants in Texas.
The report shows 5,385 megawatts of generating capacity were added in 2000 and another 9,188 megawatts will be added this year. The total additional capacity can power more than three-and-a-quarter million Texas homes on the hottest summer day.
"If you build it, they will come," said PUC Chairman Pat Wood, III. "Texas built a positive environment for clean, efficient power plants and investors continue to come here. Now it's time for customers to enjoy the benefits of choice."
The power-plant construction picture in Texas is as follows:
· Since 1995, 29 generation projects have come on-line. If they all were to run at capacity at the same time, they could produce 9,400 megawatts of electricity at any moment. A 500-megawatt plant could power about 60,000 Houston homes.
· Another 26 projects totaling 14,200 megawatts are under construction.
· In addition, 31 projects that would total 18,900 megawatts -- if they are built -- have been announced.
Texas attracts new plants for a number of reasons, including the growing economy, a clear and relatively easy permitting process, deregulation and a good, accessible supply of natural gas.
"Texas has clearly been the easiest place in the country to site, build and construct a plant," said Joe Sannicandro, director of the North American electric power-plant group for Cambridge Energy Research Associates, a Massachusetts-based consulting group.
June 28, 2001,
Houston Chronicle article excerpts
The public utility model served our nation well for many, many decades.
Texas, however, is supposedly "deregulated".
I admit, I am uncertain exactly what that means in Texas.
"Deregulation" is a fancieful buzzword that often accompanies complex financial gymnastics.
I'm still skeptical of the concept, and given the long history of the public utility model in our nation, still tend to favor it's reliability and stability. Utility stocks were once considered to be extremely safe investments for widows and orphans. Now you can get your entire life savings wiped out by corrupt scoundrels like Enron.
Generally speaking, all the mothballed plants are located in south and west Texas where population growth has been, and will be flat
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