Jim, I think I speak for all of us in thanking you for your analysis. It would make an important contributiin as a letter to the editor (fewer than 600 words in the Dom Post) - I'd be willing to draft one for you if you like. It would also be an excellnt argument against the power line, especially n combination with the battery argument. Something like this: The stated reason is invalid on its face because new technology makes the power line obsolete. Then expose the actual motive, which screws customers in order to enrich allegheny. Thanks again. Could I use your analysis in my column?

Paul

Paul Brown Physiology Department West Virginia University Health Sciences Center Morgantown, WV 26506 (304) 293 - 1512

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"James Kotcon" jkotcon@wvu.edu 07/05/07 5:43 PM >>>

Paul, et al.:

You have obviously made the mistake of believing what Allegheny Energy says about their transmission line. :-)

The purpose of the transmission line is NOT to relieve congestion or increase system reliability, no matter how many times Allegheny says so. The purpose is to make more money from Allegheny's old dirty power plants. They can do that by supplying more electricity to East Coast cities during peak periods. Installing batteries in those cities would allow those customers to recharge the batteries at night when demand is low and electricity is cheap, but Allegheny makes more money by selling during peak daytime periods. This is primarily due to the obscure way that electricity is priced on the wholesale market. The congestion is not so much a "capacity" congestion, but an "economic" congestion.

It costs Allegheny approximately 3 cents per kilowatt to generate electricity, and another 3 cents per kilowatt to transmit it through the grid to your home. (All numbers used are approximate and may vary from year to year, but they illustrate the principles involved.) That retail price of 6 cents is a monthly average of all the plants and transmission lines and all their expenses used over a period of years. But at any given time, cheap base load plants like Fort Martin can generate electricity at 1-2 cents, while more expensive natural gas plants require up to 6-12 cents per kilowatt. Coal-fired base load plants take a lot of time to ramp up and shut off, so they are mostly used full time for "base load. Because it takes time to heat them up and cool them off, utilities keep looking for ways run their plants at night so they do not have to waste money and energy during start-ups and shut-downs. Natural gas plants can be turned on and ramped up very quickly, but their fuel costs are higher, so they are turned on only a few hours per day when needed for peaking power. The natural gas plants, and their higher costs, are averaged into your monthly bill with the coal plants. Within a given service territory, it makes sense to use the batteries to more completely utilize the lowest cost plants.

But on the wholesale market, electricity is sold on an hour-by-hour, or even minute-by-minute basis. When demand is high, utilities need to buy the more expensive peaking power, often at prices of 12, 15, or even 25 cents per kilowatt. The Regional Transmission Operator (PJM) holds an hourly auction to determine the price of electricity, so each plant bids to deliver so many megawatts at whatever price they can afford. PJM then accepts bids, in order, from the lowest to the highest cost generators, until they have enough generation capacity to meet the demand for that particular hour. But every power plant whose bid is accepted is paid the same rate as the highest accepted rate, and any plants whose bids are higher (and whose electricity is not needed) will not sell any electricity and must be shut down until they are needed. This auction is rigged to provide an incentive for generators to bid the lowest price they can while still making a profit, as they make no money at all if they do not operate their plants. But the net effect is that wholesale generators who can generate very cheaply (1-3 cents) can sell that electricity for e.g., 24 cents if they can get it to the market and displace generators who cost 25 cents per kilowatt.

Hence use of storage batteries would make good energy policy, but it does not make fabulous windfall profits for Allegheny because recharging the batteries at night (using nighttime base-load rates) would only make Allegheny 2-3 cents, not 12-24 that they can make during peak load periods. In fact, under this auction system, Allegheny wants to maximize the loads during peak daytime periods, so investments to even out the day/night peaks are counterproductive (for Allegheny). The only thing standing in Allegheny's way is the economic congestion on the current transmission grid, which prevents them from actually delivering the electricity to the highest paying customers. This is what the US-DOE describes as "economic congestion" which means that there is already enough generating capacity to meet the demand in East Coast communities, but with a new transmission line, electricity from these expensive East Coast plants could be economically displaced by Allegheny's older, dirtier, cheaper plants. US-DOE and Allegheny want us to believe that their is a "capacity congestion" which could lead to blackouts and system-wide collapse. But the capacity congestion really only occurs a few days per year, and could be addressed much more cheaply, while the economic congestion is the real driver that makes the power line cost-effective.

Thus the real effect of the new transmission line is to dramatically increase Allegheny's profit potential, while making everyone's air dirtier. (Incidentally, this is the same mechanism that Enron used to manipulate the California markets and led to their energy crisis in 2000.) I am still unclear if it would assure that West Virginia customers would have to pay an increased cost for our electricity (in addition to paying for the power line) so that East Coast customers can pay less, but it seems likely. And that is the real reason for the new power line.

JBK

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"Paul Brown" pbbrown@hsc.wvu.edu 7/5/2007 4:09 PM >>>

It can now be argued that the transmission line is no longer the optimal solution to power distribution problems, because a better technology is already in use in West Virginia and elsewhere. See following story:

New battery packs powerful punch, http://www.usatoday.com/tech/products/environment/2007-07-04-sodium-battery_...

By Paul Davidson, USA TODAY Batteries have long been vital to laptops and cellphones. They are increasingly supplying electricity to an unlikely recipient: the power grid itself. Until recently, large amounts of electricity could not be efficiently stored. Thus, when you turn on the living-room light, power is instantly drawn from a generator. A new type of a room-size battery, however, may be poised to store energy for the nation's vast electric grid almost as easily as a reservoir stockpiles water, transforming the way power is delivered to homes and businesses. Compared with other utility-scale batteries plagued by limited life spans or unwieldy bulk, the sodium-sulfur battery is compact, long-lasting and efficient. Using so-called NaS batteries, utilities could defer for years, and possibly even avoid, construction of new transmission lines, substations and power plants, says analyst Stow Walker of Cambridge Energy Research Associates. They make wind power * wildly popular but frustratingly intermittent * a more reliable resource. And they provide backup power in case of outages, such as the one that hit New York City last week. Such benefits are critical, because power demand is projected to soar 50% by 2030 and other methods of expanding the power supply are facing growing obstacles. Congress is likely to cap carbon dioxide emissions by traditional power plants to curtail global warming. Meanwhile, communities are fighting plans for thousands of miles of high-voltage transmission lines needed to zap electricity across regions.

A test case in West Virginia American Electric Power (AEP), one of the largest U.S. utilities, has been using a 1.2 megawatt NaS battery in Charleston, W.Va., the past year and plans to install one twice the size elsewhere in the state next year. Dozens of utilities are considering the battery, says Dan Mears, a consultant for NGK Insulators, the Japanese company that makes the devices. "If you've got these batteries distributed in the neighborhood, you have, in a sense, lots of little power plants," Walker says. "The difference between these and diesel generators is these batteries don't need fuel" and don't pollute. The NaS battery is the most advanced of several energy-storage technologies that utilities are testing. The oldest and most widespread form of energy storage in the USA, pumped hydroelectricity, collects water after it spins a turbine and uses a small amount of electricity to send it back and repeat the process. Lead-acid batteries * the same kind used in cars * were installed by Southern California Edison in 1988. But the batteries, though inexpensive, typically fill warehouse-size buildings and last about five years. That's because the acid that connects positive and negative electrodes corrodes components. An NaS battery, by contrast, uses a far more durable porcelain-like material to bridge the electrodes, giving it a life span of about 15 years, Mears says. It also takes up about a fifth of the space. Ford Motor pioneered the battery in the 1960s to power early-model electric cars; NGK and Tokyo Electric refined it for the power grid. Since the 1990s, Japanese businesses have installed enough NaS batteries to light the equivalent of about 155,000 homes, says Brad Roberts, head of the Electricity Storage Association. In the USA, AEP is using the 30-foot-wide by 15-foot-igh battery to supply 10% of the electricity needs of 2,600 customers in north Charleston, says Ali Nourai, AEP manager of distributed energy. The battery, which cost about $2.5 million, is charged by generators from the grid at night, when demand and prices are low, and discharged during the day when power usage peaks. By easing strains on the grid, especially on the hottest summer days, the battery lets AEP postpone by about seven years the roughly $10 million upgrade of a substation and reduce the chances of a blackout, Nourai says. After it upgrades the substation, AEP can move the battery to another location. "Our vision is to have (batteries) throughout our system," he says.

Storing wealth from wind farms A more intriguing goal is to wring more energy out of the wind farms that are cropping up across the country. Wind typically blows hard at night when power demand is low, producing energy that cannot be used. When demand peaks midday, especially in the summer, wind is often sporadic or absent. NaS batteries could let AEP store wind-generated power at night for daytime use. Next year, AEP plans to install another NaS battery in West Virginia to provide backup power in case of an outage * the first such application of the technology, Nourai says. The battery would kick in automatically, so customers would see no disruption. Other utilities are planning or considering the technology. In Long Island, N.Y., a group of utilities plans this summer to install an NaS battery at a bus depot. The battery is charged at night, when power prices are low, and discharged during the day to pump natural gas into tanks to provide fuel for the buses, says Mike Saltzman of the New York Power Authority. That cuts electric costs for the bus company and eases stresses on the grid. Pacific Gas & Electric is leaning toward installing a much larger, 5-megawatt battery by 2009, enough to power about 4,000 homes, says PG&E's Jon Tremayne. The biggest drawback is price. The battery costs about $2,500 per kilowatt, about 10% more than a new coal-fired plant. That discourages independent wind farm developers from embracing the battery on fears it will drive the wholesale electricity prices they charge utilities above competing rates, says Christine Real de Azua, spokeswoman for the American Wind Energy Association. Mass production, however, is expected to drive prices down, Mears says. He predicts NaS batteries will start to become widespread within a decade. Meanwhile, other storage devices are gaining traction, too. A group of Iowa municipal utilities plans to use wind turbines to compress air during off-peak hours that will be stored in an underground cavern. The air would be released at peak periods to run turbines and generate power for about 200,000 homes. Another technology, the flywheel, has a massive cylinder that can spin for days after being started by a generator. The cylinder can then activate a turbine to supply electricity for a few seconds or minutes when it's needed, for instance, to head off an interruption to a computer center from a lightning strike. "We'd like to see storage ubiquitous," says Imre Gyuk, head of energy storage for the Department of Energy, which helped fund the AEP project. "Stick it any place you can stick it."

Paul Brown Physiology Department West Virginia University Health Sciences Center Morgantown, WV 26506 (304) 293 - 1512

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Duane330@aol.com 7/5/07 3:50 PM >>>

REMEMBER: The DOE National Interest Electricity Transmission (NIET) Corridor

comments DEADLINE is July 6th!

You should submit comments electronically at:

http://nietc.anl.gov

You can attach one file no larger than 10MB. So write a letter and attach it to an email. Or, just send an email letter.

Address it to:

The Office of Electricity Delivery and Energy Reliability, OE-20 U.S. Department of Energy 1000 Independence Avenue SW Washington, DC 20585

"If you are commenting on Docket No. 2007-OE-01 (the draft Mid-Atlantic Area National Corridor), your comments must be marked "Attn: Docket No. 2007-OE-01."

So let's get all of our comments submitted a.s.a.p. Getting comment in on the excessively large area of the NIET Corridor is extremely important, covering essentially the northern half of West Virginia.

Note that Gov. Manchin first supported this Corridor, but now opposes it, more or less.

NOTE: There is no crisis in power on the East Coast. The eastern states need to (1) practice conservation and energy efficiency to the greatest extent possible, then (2) devise a plan that involves alternative fuels such that carbon dioxide emission can be REDUCED, not EXPANDED in the near and long term future. The "greenhouse effect" is real and huge!

Duane Nichols, CLEAR and Board Member of MVCAC.

See what's free at AOL.com.