Programs to promote efficiency promise much greater cost savings

than diversification through coal

Navigant (one of the city of Tallahassee’s energy consultants) found that by continuing to use natural gas and adding an aggressive energy efficiency program, the city would save an average of $10.7 million a year. That’s savings almost six times greater than the $1.9 million in savings for the city projected from the coal plant, and customers who take advantage of efficiency opportunities would save even more.

Current Plans	Fossil Fuel Only Cost in Millions	Projected Annual Savings from Coal, in Millions	Projected Savings as a Percentage of Total Costs	Cost in Millions, With Efficiency Programs	Projected Annual Savings from Efficiency Programs, in Millions	Projected Savings as a Percentage of Total Costs
All Gas	$4,870.0	$1.9	1.1%	$4,549.7	$10.7	6.6%
Taylor Energy Center coal	$4,814.5			$4,532.4	$9.4	5.9%

In addition, it would delay the need for any type of additional fossil fuel generation by until 2015, and provide a hedge against rising fuel prices.

The investment to get this return averages out to $12 million a year. There was some discussion at the city commission meeting about whether Tallahassee could afford this level of investment. The city clerk’s office pointed out that the current value of the principal and interest on the Taylor Energy Center will average $27 million a year. If it comes to a choice between the Taylor Energy Center and an aggressive efficiency programs, the expert analyses show that the return on investment for investment in efficiency will be significantly better, even if the program reaches only 50% of the maximum achievable savings. From a strictly economic point of view, efficiency is the better choice for the city.

Cost savings from diversification by adding 30 MW of biomass to our natural gas generation would be slightly more than diversification through coal alone:

If the city invested in 30 MW of biomass under the terms currently proposed in negotiations with BG&E and did not build a coal plant, it would result in $2.0 million in annual savings compared to $1.9 million we might save by diversifying through an investment in coal alone. Some indications point to a potential for greater biomass generation in the future, and we would like to see the city continue exploring the potential feedstock for additional clean biomass generation.

Current Plans	Fossil Fuel Only Cost in Millions	Projected Annual Savings from Coal, in Millions	Projected Savings as a Percentage of Total Costs	Cost in Millions, with Biomass	Projected Annual Savings from Biomass, in Millions
All Gas	$4,870.0	$1.9	1.1%	$4,810.60	$2.0
TEC coal	$4,814.5			$4,779.50	$1.2

The Big Bend Climate Action Team (BBCAT) has done a rough estimate of the impact of adding both the aggressive efficiency programs and 30 MW of biomass. If the impact of the efficiency programs on the reduced costs with biomass is proportional to its impact on the fossil fuel only plans, a plan with natural gas, biomass and aggressive efficiency programs will end up costing slightly less than a plan with coal, biomass and aggressive efficiency programs. Our calculations are as follows:

Current Plans	Cost of "Fossil Fuel Only" plan in Millions	Cost in Millions, With Efficiency Programs	Plan Cost with Efficiency Programs as a Percent of Fossil Fuel Only Cost	Plan Cost in Millions, with Biomass	Estimated Plan Cost in Millions with Biomass & Efficiency Programs *
All Gas	$4,870.0	$4,549.7	93.4%	$4,810.60	$4,494.21
TEC coal	$4,814.5	$4,532.4	94.1%	$4,779.50	$4,499.45

At the June 28, 2006 commission meeting, staff stated plans to do this analysis to reoptimize the candidate resource plans with efficiency and renewable resources.  This reoptimization is a step in the right direction, and such analyses should be prepared as soon as possible, and shared promptly with the BBCAT and the city commissioners.

In the current energy economy, there are considerable advantages to deferring major fossil fuel investments such as a coal plant:

We are on the brink of tremendous technological and regulatory changes in the energy industry. In times of flux such as these, as we face fossil fuel price increases and dramatically increasing awareness of the economic and social costs of climate change, deferring investment in a coal plant, which has roughly double the carbon-dioxide emissions of our current generation, makes economic and well as ethical sense. Changes such as increased potential for cost-effective biomass feedstock production, development of technology for sequestering carbon-dioxide, even tidal power turbines are all possible developments within the next twenty years. Since we have the capability of waiting, why jump into a technology that is likely to be penalized in the future if we as a nation are responsible in addressing the causes of global warming.

Tallahassee has a unique opportunity to become a leader of the Southeast in addressing global warming

If media attention and attendance at An Inconvenient Truth are any indication, Tallahassee, like the rest of the nation, is awakening to the threats posed by climate disruption. As the Democrat recently noted, Florida is uniquely vulnerable to the intensifying hurricanes and rising sea levels associated with global warming. The best hope of averting worse problems than we’re already facing lies in local actions in line with the U.S. Mayor’s Climate Protection Agreement signed by Mayor Marks. Although the problem is global in nature, American cities and states are leading our country in addressing it.

In making the decision that faces the city about our energy future, city commissioners could make a fiscally sound decision that will position the city as a leader in climate action. If they decide to invest now in the Taylor Energy Center, we dramatically increase our contribution to global warming over the next thirty years. Tallahassee’s share of Taylor Energy Center will increase our emission of carbon dioxide by more than half a million tons a year, or 17 million tons over the next 30 years. With a projected 50 years of functioning for the plant, that will increase to 28.7 million tons.

An alternative future is to diversify the city’s existing clean natural gas generation with an investment in biomass and an aggressive efficiency program to limit growth in demand. These investments would save us money, avoid the risk of being on the wrong side of climate abatement efforts, and diversify our fuel sources. They will position us as the clear leader of the southeast in addressing climate change concerns. Since our base generation is natural gas, we could exceed Austin’s claim to be the national leader in avoiding climate change impacts – without the benefit of cheap wind power.

Making this investment in efficiency and renewable energy may seem like a no-brainer, but it will require vision, courage and commitment for the city to chart a new and less familiar path. But if we are serious about addressing the impact of our city’s actions on our climate, now is the time to put an energy plan in place that uses efficiency and affordable renewables like biomass to meet our energy needs, lower costs, and reduce our contribution to global warming.