January 2013 Brief: Volume 20, Number 2
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Wasting Renewable Energy in Iowa
by Deborah D. Thornton
“Every single day, water is flowing through the gates. When you see that rolling, turbulent water going by, that is wasted renewable energy,” says Mark Stover of Hydro Green Energy, Illinois. Unfortunately, he is correct. According to the U.S. Department of Energy, ten existing dams on the Mississippi River and two on the Des Moines River could be retrofitted with hydroelectric turbines with the potential capacity of 680 megawatts. These turbines could produce enough electricity to power over 250,000 homes, or about 20 percent of the total homes in Iowa, with low-cost, completely renewable energy.
This does not include the potential electricity from small-scale “run-of-the-river” dams, using only the daily water flow to generate electricity. A small-scale hydroelectric power plant generally has a capacity of less than 15 megawatts and/or a dam height of less than 65 feet. Unfortunately, no new licenses have been issued in Iowa by the Federal Energy Regulatory Commission (FERC) since 2010.
The Nashua Mill Dam and Powerhouse, which became operational in May of 2012 is an excellent example of both the problems and success of retrofitting a smaller dam to generate electricity. The original dam and powerhouse were constructed in 1917. The dam was rebuilt in 1989, but generated no electricity. The city filed the official application for a license in April 2009, after several years of preparatory work. The final license and approval to begin power generation was issued three years later.
This project was built and managed by a private company – Modern Hydro of Waupaca, Wisconsin, and cost approximately $2.6 million. The total regulatory process took over six years to complete. Currently it is single turbine, with more turbines and generators to be added. This facility can generate just under four million kilowatt hours of electricity per year, running in a fully automated run-of-the-river mode. Based on annual use of about 11,000 kilowatt hours (kWh) of electricity per house, it can power about 360 homes for a year. The energy from the Nashua Powerhouse is primarily used to power city facilities, with extra power sold back to the grid at 4.5 cents/kWh. In addition, the Federal government pays a renewable energy incentive of 1.8 cents/kWh, and provides a one cent per kWh “green tag.” The renewable energy incentive is the same one used by the wind power industry which is the focus of much recent discussion.
Not only is this fully renewable energy, but it is very inexpensive. The FERC analysis of the project and electricity generation costs showed that in the first year alone there would be a savings of over $78,000 to the city, compared to purchasing power. The estimated positive cash flow for the Nashua power house is estimated to be as much as $241,000 a year, once the 20-year bonds are paid off. The facility has an expected life of another 30 years after that. Nashua will have both significant positive cash flow, and control its own power needs for the next 50-60 years.
Construction took approximately a year and a half – the rest of the six-year process was bureaucratically driven regulatory approvals and documentation. According to Nashua Mayor John Phyfe, it took “monstrous amounts of paperwork.” The process begins with a request for a three-year preliminary permit to first do a study to determine project feasibility, and it then proceeds through various studies and authorizations. The FERC by law must consider, on an equal basis, issues such as benefit of interstate or foreign commerce, improvement of waterpower development, protection, mitigation and enhancement of fish and wildlife, irrigation and flood control, water supply, and protection of recreation. There is no provision for commerce, waterpower development, or benefit to the taxpayers to take priority.
Some environmental concerns about hydroelectric power include the effect on the water temperature and oxygen levels for fish, as well as endangered animals and plants adjacent to the river. Power lines must not harm migratory birds. Plants of concern are the Western prairie fringed orchid and prairie bush clover. The environmental assessment for Nashua dealt with protecting these plants, though they were not found. The tiny Indiana bat – indistinguishable from the common Brown bat – is another species which requires special consideration. Though they live in trees and caves, near cropland, they are of concern to hydroelectric generation.
The Nashua Dam and Powerhouse is one example of how hydroelectricity can be used to provide reliable, inexpensive power and energy independence – and how the regulatory process both delays use of this important renewable resource and drives up the cost of production.
At Mississippi River Lock and Dam #18, at Burlington, Iowa, the proposed installation of 24 “very low head” turbines has basically come to a stop. This is a very low head dam because the drop is only four to seven feet. The preliminary permit expired as of August 2012. According to City Manager Jim Ferneau, the town does not have the financial ability to build the power plant. A Canadian firm, Coastal Hydropower, is trying to get approval from the FERC to be the licensee for Burlington to build and operate the $86 million plant. Contracts between cities and private-sector builder/operators are closely scrutinized by the FERC. A similar arrangement at Mississippi Lock and Dam #21, located at Quincy, Illinois was turned down by the FERC last year because of “misuse of municipal preference.”
Fortunately many environmental groups – who have previously argued for the complete removal of dams and returning rivers to their “wild” state where fish can “swim free” – are now recognizing that it makes both environmental and economic sense to use the renewable energy potential at dams which are already in place. As evidence, a spokesperson for the Hydropower Reform Coalition in Washington, D.C., recently agreed that if a dam “is not likely to go away anytime soon, why not use it for another useful purpose?”
If we are truly concerned about renewable energy and power generation by oil and coal, we must insist that FERC reduce the onerous regulatory environment and support hydroelectric power. Though not flashy, with the dramatic visuals of wind turbines and solar panels, it is fundamentally a better, more reliable, more cost-effective, and controllable energy source. For American taxpayers to let a federal bureaucracy delay implementation of this important energy source is shortsighted. Wild flowers, tiny bats, migrating birds, and common fish are worthy, but regulatory overreach by the FERC is NOT!
Deborah D. Thornton is a Research Analyst with Public Interest Institute, Mount Pleasant, Iowa. Contact her at Public.Interest.Institute@LimitedGovernment.org.
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