MID sees future: Clean air at a cost

Reducing greenhouse gas emissions, a key premise in the global debate about climate change, isn't just another talking point in California -- it's the law.

Just ask the folks at the Modesto Irrigation District, who by 2012 must figure out a way to slash up to 20 percent of the carbon dioxide and other pollutants the MID releases into the air as it generates power.

Today, MID power plants emit about 1 million tons of carbon dioxide a year.

Achieving the state-imposed goal to reduce that amount will be an expensive undertaking, adding perhaps as much as $7 million per year to MID costs.

That figure is an estimate, but MID officials say this much is certain: Cost increases will be passed on to MID customers. The MID serves more than 110,000 commercial and residential electric accounts.

Many of the primary energy alternatives to coal and natural gas -- geothermal, wind and solar -- are much more expensive to operate. It's also expensive to retrofit existing power plants with pollution-curbing technology.

Roger VanHoy, the MID's assistant general manager for electric resources, estimated that reducing greenhouse gases could add 30 percent or more to electric bills over the next decade. That translates into a 3 percent -- or higher -- bump up every year for the next 10 years.

There is no "average" monthly bill for business or residential customers because the amount owed reflects energy used.

For example, a small office uses far less electricity than a cannery.

An average residential household, according to the MID, uses about 800 kilowatt hours a month. That amounts to about $102 per month.

VanHoy admits his 30 percent rate hike estimate is "soft" because so many price and cost variables are unknown. The California Energy Commission still is in the process of writing the rules.

"There are two laws," he said. "One affects us near-term, Senate Bill 1368, which prohibits new (electricity) generation from coal-fired plants.

"The other, Assembly Bill 32, the Climate Change Solutions Act, is longer-term. It requires reducing greenhouse gas emissions and takes effect in 2012."

A variety of chemical compounds -- some naturally occurring in the atmosphere -- are called greenhouse gases because they trap heat in the air.

As sunlight passes through these gases and strikes the ground, some of the energy is reflected back into the air as infrared radiation. Greenhouse gases absorb the radiation and hold it in the air. As a result, surface temperatures climb.

Some of these gases -- water vapor, carbon dioxide, methane and nitrous oxide, for example -- occur naturally.

They also result from human activity or products.

Greenhouse gas emissions aren't just an MID problem, however.

All electric utilities in the state must comply, VanHoy said, whether they are publicly operated like the MID or investor-owned companies such as Pacific Gas & Electric Co.

The difficulty for the MID is that government-imposed mandates usually don't come with a funding source, said VanHoy, General Manager Allen Short and other district leaders.

So, MID customers will end up footing the bill.

"When you're already running lean and mean, there just isn't a lot of fat or waste to cut," said MID spokeswoman Kate Hora said. "The only place to go (for increased revenue) is the rates, our main source of revenue."

The MID's electric rates are among the lowest in the state.

Hora also pointed out that the MID uses a two-tier system, charging one rate for those who use less than 500 kilowatt hours per month and a second rate for more than 500 kilowatt hours per month.

Other utilities, she said, may use three or four different tiers, with rates escalating as usage rises.

Unlike city and county governments, Hora and VanHoy said, the MID doesn't receive state or federal tax revenue or grants.

"The ratepayers assume all the costs," said Hora, "and all the benefits."

In a theoretical world, paying an extra few cents per kilowatt hour to reduce greenhouse gas pollutants makes sense. In the real world, it's a different story.

Without worldwide participation, many scientists say, California's effort to reduce greenhouse gases likely will be buried under tens of thousands of tons of harmful emissions emanating from India and China.

Numerous government agencies, research groups and independent scientists worldwide have watched Asia's economic expansion and concluded that its virtually unregulated coal-burning power plants are polluting at an alarming clip.

Pollution coming from China

Earlier this year, a number of environmental watchdog organizations reported that China has eclipsed the United States as the world's largest polluter.

Short and VanHoy, during the MID board's latest budget workshop, suggested that money earmarked to reduce greenhouse gases in California might be better spent in China, whose coal-fired electric generating plants are a major source of emissions.

VanHoy cited a recent presentation by John Doggett of the McCombs School of Business at the University of Texas.

Using a variety of studies, Doggett contends that "on some days, almost a third of the air over Los Angeles and San Francisco can be traced directly to Asia."

"With it, comes up to three-quarters of the black carbon particulate pollution that reaches the West Coast," Doggett wrote.

The prevailing winds, according to experts Doggett cites, carry from Asia vast clouds of dust layered with man-made sulfates, smog, industrial fumes, carbon grit and nitrates.

The MID, meanwhile, is contemplating selling its part ownership of a coal-fired electric generating plant in New Mexico. Despite spending millions to clean up emissions at the plant, it apparently runs afoul of SB 1368, which bars the MID from importing the power.

There is no timetable for such a sale, and the MID continues to pursue a state exemption that would allow it to continue to use electricity generated in New Mexico, which provides about 19 percent of MID's annual power needs.

If that source is lost, VanHoy and other MID leaders say, the district will be forced into the marketplace to find replacement power, which could be more expensive.

The Modesto Irrigation District Board of Directors will continue budget discussions this morning. Board members meet at 9 a.m. today in the district boardroom at 1231 11th St.

Bee staff writer Michael G. Mooney can be reached at mmooney@modbee.com or 578-2384.

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