| September
2004 Issue
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Wisconsin Favorites
Lighthouse Fever
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ARCHIVES |
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Managing Megawatts
It’s seven years since Wisconsin’s initial
energy crisis,
and things have been calm…are we out of the woods?
Continuously, every minute
of all 24 hours every day, electric utility control-room operators
are responsible for matching the electricity generated and fed
through their transmission lines with the moment-to-moment needs
of end-users. Failure to maintain equilibrium between generation
and consumption can prompt voltage fluctuations and “power
quality” problems. The consequences could include ruining
products in power-sensitive manufacturing processes; damaging
industrial equipment, domestic appliances, and utility infrastructure;
and risking interruption of electrical service to large numbers
of customers.
The control-room operator’s
crucial activity—balancing production with demand in real
time—is replicated on different time scales and at other
levels across the energy industry: in utility and cooperative
board rooms and among regulatory agencies and policy-making bodies
where decisions are made that determine the adequacy of future
power supplies.
Reliable Sources
For a long time before the mid-1990s,
Wisconsin was known for highly reliable, low-priced electricity.
Even so, it wasn’t surprising when major utilities repeatedly
interrupted service to selected commercial and industrial customers
in June 1997.
Officials had predicted trouble
since the preceding winter. Lengthy maintenance shutdowns had
both the Kewaunee and Point Beach nuclear plants off-line. This
deprived the state of enough generating capacity to run the equivalent
of three-quarters of a million average homes, guaranteeing Wisconsin’s
famously weak transmission system would struggle to import more
than the usual 15 percent of daily electricity usage—challenging,
even before temperatures started their seasonal climb.
For two summers, system reliability
was touch-and-go. Gradually, several factors combined to grant
a reprieve. The first new generation sources came on line, and
the nuclear plants resumed operations by the fall of ’97.
Then average summer temperatures began running a little cooler
and so did the economy, reducing electrical demand.
There has been no prolonged loss
of a major generating facility in the past seven years. Meanwhile,
more than 1,600 megawatts of new capacity have been added. Wisconsin’s
electrical reliability appears at least as strong now as it was
before trouble erupted in the ’90s. But always the question
lingers: Is it enough?
Cool, Yes; Comfortable, No
Last month, Wisconsin Energy Cooperative
News asked two former chairs of the state Public Service Commission
(PSC) if Wisconsin has made the right moves and built itself a
cushion, or if we’re one heat wave away from going over
the cliff.
Joe Mettner, an independent consultant
since leaving the PSC in 2003, noted ominously, “We haven’t
seen a heat wave in quite a while.”
In fact, Wisconsin has not seen
90 degrees this year. National Weather Service records show temperatures
above 90 in La Crosse (where for some reason it tends to run a
bit warmer) on just three days in 2003, 14 each in 2001 and ’02,
and only four in 2000. Most important, very few of those readings
occurred on consecutive days.
Without high temperatures exceeding
90 during any recent four-day period, “we haven’t
seen the peak air-conditioning utilization that would really test
the system,” Mettner said. “We keep setting records”
for peak electricity demand each summer, he adds, “but we
haven’t had a real good punch in the ribs to understand
how vulnerable we are.”
Ave Bie, who vacated her post on
the commission in July, said the state has “come a long
way in the past six years,” but she doesn’t consider
the job nearly done. Though at least 3,000 megawatts of new generation
should come on line in the next several years, “demand continues
to go up and we will really require these very difficult planning
discussions to continue,” Bie said.
Complicating things, those “difficult
planning discussions” don’t just involve Wisconsin,
where all officialdom recognizes a need to catch up after a couple
of decades building almost no new electric infrastructure.
Federal efforts since the 1980s
to establish competitive, geographically broad wholesale-electricity
markets, have subjected transmission grids to new stress. Bie
says this requires “a continuing dialog” between Wisconsin
utilities and regulators and independent transmission operators
who control bulk power flows across much of the Midwest and several
Eastern states.
“This is not just about individual
power plants,” she says. Infrastructure projects “need
to be viewed in the context of how they help the regional marketplace.”
Please Drop Us a Line
PSC policy requires Wisconsin electric
utilities to have a “reserve margin” of 18 percent—that
is, ownership or control of 18 percent more than the forecast
peak demand—as a hedge against the loss of a major power
plant.
But the utilities lack the generating
capacity to meet that requirement themselves, and unfortunately,
the regional marketplace supplying a good part of our daily needs
does not have many paths by which to send its product here.
Only four extra-high-voltage (345,000-volt)
lines are available to import power into Wisconsin: one from the
Twin Cities to the Stevens Point area and three crossing the Illinois
border. Neighboring states, unhampered by the Great Lakes, have
similar lines numbering in the teens.
Moreover, a single major line to
the west is an open invitation to a thunderstorm-induced blackout,
to say nothing of the way it affects import capacity even on balmy
days. With that in mind, the American Transmission Company (ATC)
hopes to have a new 345-kilovolt line between Wausau and Duluth
by the summer of 2008. But it’s sobering to realize that
Wisconsin Public Service Corp. and Minnesota Power first applied
to build the line in 1999, and the need for it—or something
like it—was recognized long before.
Wisconsin’s capacity to import
electricity is essentially the same as before the crisis arrived
in 1997. Unless it’s deteriorated, that is.
Losing Ground?
A concern infrequently heard is
the limited capacity to transfer electricity within Wisconsin.
Mettner warns that between transmission systems of major state
utilities, “if you look at the available flowgate capacity
and the ability to push power from one system to another, intrastate
capacity has diminished as a percentage of peak load.”
Part of the problem seems to be
the huge increase in long-distance wholesale-power transactions
since federal open-market pressure was applied to a grid designed
to connect with adjacent utility control areas, not serve as a
thruway.
Mettner says, “If you look
for any incremental space to accommodate new load growth, you
tend to find it’s not there,” adding, “Some
people think it’s headed in the negative direction because
of the new [wholesale] uses.”
Impeding resolution of such problems
is the question of who pays. Mettner notes that even adding a
major generating plant—an evident improvement—triggers
new needs. For a proposed clean-coal plant near Wausau to be useful,
he explains, the Duluth–Wausau line needs to be built along
with other, shorter transmission upgrades.
Initially, he says, these things
will be built and paid for by ATC, but there will be a long-term
debate about whether the costs are ultimately recovered from the
incumbent utilities, by others transporting power across the system,
by those buying it, or still others.
Picking up the Tab
Cost issues will never go away,
and even now, with much left to do, there are rumblings that electricity
is getting more expensive. Mettner doesn’t buy that, pointing
out that in inflation-adjusted dollars, the price of electricity
has remained generally steady over the past 20 years.
Bie’s first thought is of
the cost of building nothing, which she describes as “very,
very expensive.”
“You can’t even put
a number on the plants that would have to shut down,” Bie
says. “You would be betting our quality of life and our
economy on the hope and prayer that you’d be able to buy
power on a given day when everybody else needs it too, and then
get it into the state.”
It’s been an easy summer and
an easy couple of years. But it’s not over.—Dave Hoopman |
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Looking Up
Satellite Service Enters New Era
A dozen years ago, electric cooperatives
took a risk and inked a business deal to bring quality television
programming to rural consumers. The arrangement involved buying
into a venture that would rocket satellites into space in order
to broadcast the TV signals, and many co-ops bought exclusive
franchise rights to serve defined geographic areas.
DirecTV service delivered on what
the cooperatives had promised, and since 1994 the co-ops’
satellite subsidiaries have enjoyed steady growth in subscribers
and program offerings.
The latest innovation, destined
to be available early next year, is high-speed Internet service
that will be powered by a satellite launched this past July
17. Consumers will obtain the service, however, from cooperative-run
companies that are refocusing their business structures.
Freeing Franchises
Wisconsin’s electric cooperatives
that run satellite-service subsidiaries have sold or are in
the process of selling their exclusive-territory franchises
to DirecTV, the division of Hughes Electronics that they helped
launch into national prominence as a provider of satellite-TV
service in the early 1990s. DirecTV was recently purchased by
Rupert Murdoch’s News Corp.
“We knew after Murdoch bought
DirecTV they would want to make changes to our contracts,”
said Greg Blum, CEO of Central Wisconsin Electric Cooperative,
which is a partner in Mid-Wisconsin DBS. “It was pretty
clear that DirecTV wanted to own all the franchises.”
He explained that the co-ops had been essentially buying programming
at wholesale from DirecTV and then selling it to consumers in
the franchised areas, earning a profit from retail pricing.
According to Todd Howard, CEO
of Chippewa Valley Electric Co-op (which operates Chippewa Valley
Satellite), a downside to the franchise arrangement was that
the local companies couldn’t always afford to offer the
same kind of special pricing on program packages and promotions
that DirecTV was marketing to consumers in its national advertising.
One reason for the financial inflexibility, he noted, was that
when the co-op bought satellite dishes and receiving equipment
from DirecTV, they were not getting them at discounted prices,
unlike a host of other retailers who simply operated as agents
for DirecTV.
“They offered us a number
of options,” said Howard. “We could continue as
we had been and operate until the end of the contract in 2011,
we could sell the franchise and get out of the business completely,
or we could sell the franchise and continue to operate as a
servicer/retailer for DirecTV.” Chippewa and the other
satellite companies connected to Wisconsin’s electric
co-ops elected the third option.
“For those of us who stayed
on, it’s a good thing,” observed Rita Sladich, executive
vice president-operations of Clark Electric Appliance and Satellite.
“It eliminates the franchise area, so now we can go anywhere.
We don’t have to tell a prospective customer, ‘No,
you’re not in our area.’ And now we can offer all
the specials that DirecTV offers.
Still Serving
Under the new arrangement, DirecTV
pays Clark, Chippewa Valley, Mid-Wisconsin, and other companies
to perform dish and equipment installations for new subscribers
and to act as a call center to field consumer questions pertaining
to DirecTV. The companies will continue to offer the various
television-program packages—and bill customers for them—but
all revenue from such programming reverts to DirecTV under the
new contract.
What remains to be ironed out,
according to Blum, is what DirecTV will pay the co-ops to perform
additional services such as upgrades and repairs. “The
current contract just covers commissions for installations and
phone support,” he said, noting further agreements to
address such operational issues are expected within the next
few months.
Blum credited the National Rural
Telecommunications Cooperative (NRTC)—the organization
the co-ops organized in 1986 to spearhead development of advanced
telecommunications service for rural areas—for brokering
an attractive deal for the franchise buyouts.
“We got more money up front
than what was originally on the table,” he related, observing
that the co-ops’ track record for customer service and
their ability to successfully grow business in rural areas played
into the settlement with DirecTV.
“But what it really came
down to was a decision to preserve jobs, service to our members,
and a continuing business opportunity. And they offered us a
financial reward up front for selling our exclusive territory
rights,” said Blum.
WildBlue, Yonder
When the new high-speed Internet
service via satellite—called WildBlue—becomes activated
next year, the resulting financial arrangement with the co-ops
will be similar to the way DirecTV service had been handled
previously. The co-op subsidiaries will sell the service at
retail and retain the profits. Although WildBlue is being offered
through an independent broadband company, part of the settlement
NRTC made with DirecTV provided for the co-ops’ ability
to “bundle” WildBlue with DirecTV service.
According to Sladich, the WildBlue
offering will be faster and considerably cheaper than DirecTV’s
existing satellite-Internet service, DirecWay. “It’s
a different type of satellite, it requires a smaller dish, and
it’s easier to set up and operate,” she said, estimating
that installation could be about half of what DirecWay costs,
and monthly fees are expected to start in the $39–$49
range for residential customers.
Potential
Just as was the case 10 years
ago with the lack of quality television signals in rural areas,
an estimated 25 million U.S. homes are without access to broadband
(high-speed) Internet service.
“Our members will now be able to offer their communities
broadband Internet comparable to what is offered in urban areas,”
said Bob Phillips, CEO of NRTC. “Many members offer DSL
or cable modem, but they need WildBlue to reach everyone in
their communities. Phillips said 240 NRTC members have already
committed to offer the new satellite service to their customers.
Accessible from virtually anywhere
in the continental U.S., WildBlue is projected to be up to 50
times faster than the standard 56K dial-up connections for Internet
service.
Sladich said WildBlue will be
rolled out nationwide by April 2005, and Wisconsin will likely
be in the last of five regions to obtain the service.
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Editorial
by Perry Baird
A Shame to Blame
During the past couple of years, we’ve
spent some inches of space in this magazine discussing what
is known—and not known—about how emissions of mercury
from coal-fired power plants affect human health. Directed at
proposed state and federal regulations that seek imposition
of expensive cleanup technology, our comments questioned: A)
whether science has demonstrated a problem truly exists, and
B) whether such emission-reduction mandates would do much to
improve anything if something was shown to warrant improvement.
We had, and continue to have, doubts about what
the new rules—on track to be in force statewide and federally—will
accomplish. However, for better or worse, they will be duly
constituted regulations, and the electric-power industry will
be obliged to follow their dictates, or face penalties. Though
we may have deep disagreements concerning rulemaking’s
outcomes and rationales, that’s just how the process and
law work.
Insufficient Infraction
But how do we begin to address the sort of government
freelancing undertaken recently by Wisconsin Attorney General
Peg Lautenschlager?
In July, Lautenschlager joined attorneys general
of seven other states in a public-nuisance suit against five
of the nation’s largest electricity producers, demanding
they reduce carbon dioxide emissions from power plants in 20
states. Named one of the defendants is Xcel Energy, which does
considerable business in Wisconsin. A Lautenschlager press release
cites “scientific evidence” that CO2-driven global
warming threatens Wisconsin with all manner of environmental
and health degradation.
The trouble is, there are no federal or state
regulations or laws (such as the earlier-mentioned mercury rules)
that the companies are alleged to have violated.
Similarly, Lautenschlager had filed an earlier
suit alleging a public nuisance against Sawyer County cranberry
grower William Zawistowski, whose farming operation has not
been accused of violating any federal, state, or local environmental
regulation.
True Public Nuisance
Now this is a problem: the state’s chief
law-enforcement officer suing presumably law-abiding individuals
and companies. Jeff Schoepke, environmental policy director
for Wisconsin Manufacturers and Commerce, asked, “Why
would anybody want to bring jobs to a state where the attorney
general sues businesses that comply with the laws?”
Wisconsin Electric Cooperative Association Manager
David Jenkins went further, asking Lautenschlager to “withdraw
from this lawsuit and cease bringing lawsuits against citizens
and organizations who have not broken the law.”
Jenkins admonished the attorney general that it
appears she has illegally re-created the office of state public
intervenor, a position the Legislature eliminated by zeroing
out its funding in the 1995–97 state budget. The main
function of that office was to launch taxpayer-financed environmental
lawsuits against state and local units of government.
“Having [the Justice Department’s]
Environmental Unit function as a de facto public intervenor
is not a lawful way to restore the public intervenor’s
office,” said Jenkins. “Only the Legislature can
do that.”
And if conduct of individuals and companies is
to be held up to some government yardstick, it presumably also
takes the Legislature—as the law-making branch of government—to
set such legal standards in the first place.
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For some inexplicable reason,
many denizens of Wisconsin have a fixation about lighthouses.
We avidly collect replicas of them, photograph them, strain
for glimpses of them, and romance the lives of their keepers.
If you’re one among us who
has lighthouse fever, we suggest a dose of island-hopping during
the Apostle Islands Lighthouse Celebration, Bayfield, September
8–29. Travelers can get their fill of the numerous lighthouses
on the Apostle Islands, with a bonus of fall color thrown in.
The celebration, named in 2002
by the North American Bus Association as one of the top 100
events for tourists in North America, centers around a variety
of cruises originating from Bayfield’s City Dock and Lake
Super Boatman’s Memorial Dock, adjacent to one another
at the intersection of Rittenhouse Ave. and Front St. With advance
planning and reservations with the Apostle Islands Cruise Service,
you can see most of the Islands’ lighthouses in just a
few days’ time. Opt to cruise past towers without ever
leaving the boat or book tours that let you land on one or more
islands for a tour.
One of the most popular non-stop
cruises for beginners is the Three-Light Cruise, allowing lake
views of three of the following lighthouses: Raspberry Island,
Sand Island, Devils’ Island, Michigan Island, and Long
Island. The cruise, from 1:30–3:30 p.m., may be booked
for September 8, 11, 14, 15, 17, 19, 23, 24, 28, or 29. The
Five-Light Cruise, offered September 13, 20, and 26, chooses
five of the above-named islands plus Outer Island. Other non-stop
cruises include the three-hour cruise (daily during the celebration,
10 a.m.), weaving past the 22 Apostle Islands past Raspberry
and Devils Island lighthouses and the famous Devils Island Sea
Caves. Several other non-sop cruises are offered.
If you yearn to get up-close-and-personal
with lighthouses, opt for one or more of the cruises that allow
you to land and inspect the tower at close range. If you like
to walk, take the Sand Island Hike (Sept. 8, 16, 20, 24, or
29 at 9:30–3:30). Pack a picnic lunch and enjoy the two-mile
groomed trail to and from the Sand Island Lighthouse. If hiking
isn’t your style, opt for the Raspberry Tour and Sand
Island View (Sept. 10, 14, 18, 22, and 26; 1:30–5:30).
The Michigan Island Landing (Sept. 9, 15, 21, and 25; 1:30–5)
allows you to tour both the Apostle Islands’ oldest and
newest lights, plus the original dwelling of the lighthouse
keeper. Several other tours are available.
Related activities during the
Lighthouse Celebration include Keepers’ Dinners on September
10, 17, and 24; Reunion Day for keepers and their families on
September 17; free lectures at the Park Service Visitors’
Center; and appearances of guest artists and authors at the
Keeper of the Light Gift Store near the dock; and a Lighthouse
Photography Contest.
For further information or to
make reservations for cruises and other events, visit www.lighthousecelebration.com
or call 800/779-4487.—Linda Hilton
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