I’ve asked a friend working for Powersouth if there’s a place we can go to find Powersouth’s Newsletter, I look forward to their CEOs comment, and I think others might enjoy his common sense as well.
For the moment, I post His comment in Feb 2011 edition of the company’s newsletter, the rest of the letter is full of good info.
Who really pays for incentives?
CEO Gary Smith discusses funding for renewable projects, his comment follows:
I am a huge fan of the Seinfeld Show. I like it because it takes everyday things, blows them out of proportion and makes them humorous — at times hilarious. It may not be a ‘show about nothing,’ but it is a show about the little things of everyday life that most people don’t notice.
One of my favorite Seinfeld episodes has Kramer coaching Jerry on how to get money for his stereo by tearing it up, insuring it through the post office, shipping it to himself and making an insurance claim for the loss. When Jerry questions Kramer about who will pay for the stereo, he responds, “…they will write it off.” After a discussion of what “writing it off” means, Jerry accuses Kramer, “… you don’t even know what a write off is, do you!”
I can’t help but think of that episode and dialogue whenever I hear the debate about government incentives and subsidies, especially subsidies and incentives for green energy or green power.
You hear a lot about green power and how it will reduce the amount of carbon dioxide released into the atmosphere, thereby mitigating global warming, reducing our dependency on foreign oil, creating a new economy based on green jobs, lowering our energy costs and generally improving our standard of living.
You also hear a lot about the need to provide government incentives to “jump start” the green economy. Just last month, U.S. Secretary of Energy, Steven Chu, and the President’s Council of Advisors on Science and Technology (PCAST) — how did we ever live without acronyms? — urged a substantial increase in the U.S. government’s investment in green energy-related research and development of $16 billion per year so we can maintain pace with China in energy innovation. That investment is in addition to the billions of dollars in government subsidies and incentives the ethanol program, the wind power program, the solar energy program and any other program that claims to be green already gets from the government.
Advocates of green energy encourage even more subsidies and incentives for green energy than those proposed by Secretary Chu and PCAST. They argue that without subsidies and incentives, renewable and green power projects cannot develop, thrive or expand. Why would that be?
The answer is that almost all renewable or green energy costs more, and most green energy costs substantially more than conventional fossil fired energy. Green energy is simply not cost competitive, and those green energy developers would go bankrupt without government subsidies and incentives. And they will not be competitive until the price of conventional fossil energy approximately doubles from its current levels.
Also, government subsidies and incentives allow the government to pick winners and losers. If they like a certain type of technology or if the developer of a project was a rather large political contributor, a technology or project may be favored.
But didn’t government subsidies and incentives help promote nuclear power and combustion turbine technology? They did, but now that the research and development is complete, those technologies are run by the private sector with private investment. But what research is being done on wind and solar? They just need the subsidies and incentives to stay afloat.
Finally, who pays for the government subsidies and incentives for renewable or green energy projects? If they are government subsidies, of course the government does.
This is where the Seinfeld episode comes into play: Do you know what a government subsidy or incentive is? The government takes your money from taxes — and we all pay taxes, whether income, property or sales taxes — and decides who gets the free government handout of subsidies and incentives.
So in the end, the government takes your money and gives it to developers of solar projects, wind farms and ethanol projects, which will increase your cost of electricity. So you pay at least twice. You pay the higher cost of power from green sources and you also pay taxes for the government to subsidize and incentivize those green projects. If you didn’t know that you paid, you are like Kramer, you don’t really know what a government subsidy or incentive is.
g
George Comment Follows.
Some of you might recognize Powersouth as having the only CAES ‘Compressed Air Energy Storage System’ in North America. http://www.powersouth.com/mcintosh_power_plant/compressed_air_energy
Note on this above link, there’s a youtube link, I’ve signed up as a subscriber, and I will ask if we can get information as to where we can go to get the CEO’s monthly comment online.
added note! if you look at the blog link, you can find Gary Smith’s comment… look here: http://powersouth.wordpress.com/
Now I don’t suggest that CEO Gary Smith holds many of my views, but I certainly respect his, and after having some time to reflect on his comments above, I think we might have reason to add to our vocabulary of popular and trendy terms. Many of us have come to recognize the term ‘Clown Car’ as being a small and impractical car, we note that clown cars are most often purchased by people wanting to make a statement versus expecting a return on investment. An example might be the not so SMARTcar when we compare it to a 4 passenger Chevy Metro or similar car and compare prices, economy, an practical use and more.
But now, we might add the ‘Kramer Car’. The People most attracted to the car will think it’s magic, they’ll buy it because of the incentives. Government Motors knows it’ll be a hard sell because it’s VERY expensive, and those who have invested in Government Motors and the philosophy might recommend we allow the incentives to double and ‘encourage’ entities to make easy loans, so folks can drive what they can’t afford.
Kramer Cars may become the heart of the REPO business once the new owners figure out their monthly payments for the car and what it cost to install an ample charging system. Insurance, the surcharge soon to levied State Road Tax you no longer pay at the gas pump, and who knows what else? It won’t be long and the Kramers of the world will quit making payments, and of course the loan and all of the subsidies will fall on the backs of the public as it so often has lately.
Remember… if it’s a good idea, you won’t need a subsidy to sell it!
One last thought, for you Kramers out there.. do note that PowerSouth really does make power for the grid out of thin Air! Imagine that…..
G
The articles that Gary Smith write every month in Alabama Living are very one sided and everyone reading his articles should keep in mind just where he’s coming from. He’s president and CEO of PowerSouth…he is in effect promoting big coal. He enjoys an entire page every month in Alabama Living to promote his energy & political viewpoints and I think it reaches some 400,000 customers every month. Talk about a personal soapbox. I’ve asked in the past if they will print a letter of article as a counter point and they will not. Smith regularly criticizes President Obama, the EPA, alternative and renewable energy, green jobs, subsidies for things like hybrid and electric cars, and the list goes on and on. He writes about ‘clean’ coal and its ‘low costs’ but he very cleverly spins and distorts much of what he writes about. Here are just a few things you won’t find Smith talking about. The coal industry is one of the most heavily subsidized industries in the country. They receive tax breaks that solar and wind start ups never enjoy. Besides subsidies and other tax breaks, coal mining operations and coal fired power plants receive generous property tax breaks. Smith likes to talk about ‘cheap’ energy from coal. Did you know that thousands of miles of waterways in the United States are contaminated with pollutants including things like arsenic and heavy metals. In fact, it’s estimated that the coal industry costs $100 billion per year in health related costs. I could go on and on with facts about ‘clean’ coal and I could easily fill an entire page with facts that point out the myths and spin and distortion found in most of Smith’s articles. I suggest that next time you read one of his articles, remember that he’s representing the coal industry, and the bottom line is the bottom line…profit. There is no such thing as cheap coal, or clean coal.
John,
Glad you made time to post, we enjoy getting your equally one sided opinion, but we need examine it further to know if it’s an informed opinion.
CEO Gary Smith of Powersouth has a very important job to do, and that’s to create energy for the Co-op members for a price they can afford to pay. Gary (and others) rightly chose NATURAL GAS as a fuel source for their power plants, and they have signed contracts for many years at realist prices for their fuel. If I were living Down South, I’d give serious consideration to moving to an area where the Power South CO-OP is operating, as I totally understand what it would be like to live through a summer at triple the cost of a KWH. Gary is committed to Natural gas, a decision that had to be made many years ago, and the CO-OP correctly rejected NUKE and Clean Coal because they believed the costs would be higher per KWH, and of course the red tape issues are real costs to the customer.
I’d like to ask you about Honda’s new compressed natural gas Civic getting an Alternative Energy Award of the Year…. was it wrong of them to give the car an award? Perhaps you think it was Gary’s friends that influenced the award? So many are looking at natural gas as a clean energy source, are they all wrong?
We out here in Washington State have made rather huge investments in Wind Power, it has been a night mare to make use of this power because the gird is no battery, it is a real-time power drain and we need real-time energy to satisfy the need. The wind turbines make their highest energy production during the spring, exactly when our hydro power peaks, and decisions are made to turn excess water flow into energy or spill it over the dam.. Hydro is a fraction of the cost, and some think those who buy power should have a right to chose between green hydro, or far more expensive wind power, recently they have chosen the hydro, and left the turbines to twist in the wind with no one wanting to buy their output. But there are other problems, wind does not always blow, and there are times when the wind goes slack during a period when the turbines are actually selling into the grid. When this happens, it is necessary to have other capacity pick up the ‘dropped’ loads, and this is a very expensive operation. This is Gary’s world, and what he likely knows and understands far better than yourself.
Here in Washington State, the media is VERY careful not to talk about the many problems with wind power generation, and at this point, those who operate the wind turbine farms are refusing to pay the traditional penalties when others have to scramble to put other capacity on line to pick up the loads they’ve suddenly dropped. These expenses are real, and someone needs to pay them, what is fair in your mind?
Perhaps, the difference between you and Gary Smith, is he must perform, and perform now, he operates in the real world, and must address real problems.
You mentioned EVs,, most people I know who are giddy over EVs don’t seem to understand that the ‘engine’ is really back in the commercial generating plant, and somehow they ignore all the losses of energy conversion back in the operating plant, and then all the losses across the power grid to their homes. but that’s not all, they ignore the cost of a very expensive charger (that allows you to charge the EV in a reasonable period of time), and more.. It’s all so easy to start their accounting of losses so close to the rear wheels, and of course they assume it’s a 70F day.
But Gary has the ear and mouth of seasoned Electrical Engineers who share other realities with him. He understands that sweltering heat could cause us to consume far more energy to run the AC than it takes to propel the car forward.
As you say.. I could go on and on with the facts, but if you’re a typical greenie, you already know all the answers.. most who visit here are skeptical, of course the opposite is gullible..
The key is investing in what you ‘think’ the answer is. Here’s somethings I suggest you do..
*Move out of Power South’s operating area.
*buy an EV now, if you think they’re the way to go, why not buy two? Did you watch the spoof ‘who killed the Electric car”? the fact is.. the market is not there, and if you haven’t ordered one.. it is you that is killing the Electric car.
*Move your 401K to all green investments.
Yes.. I know, you have facts, so let’s make use of your abilities and examine a wind power site like the ‘show pony’ Wild H John,
Glad you made time to post, we enjoy getting your equally one sided opinion, but we need examine it further to know if it’s an infomed opinion.
CEO Gary Smith of Powersouth has a very important job to do, and that’s to create energy for the Co-op members for a price they can afford to pay. Gary (and others) rightly chose NATURAL GAS as a fuel source for their power plants, and they have signed contracts for many years at realist prices for their fuel. If I were living Down South, I’d give serious consideration to moving to an area where the Power South CO-OP is operating, as I totally understand what it would be like to live through a summer at triple the cost of a KWH. Gary is committed to Natural gas, a decision that had to be made many years ago, and the CO-OP correctly rejected NUKE and Clean Coal because they believed the costs would be higher per KWH, and of course the red tape issues are real costs to the customer.
I’d like to ask you about Honda’s new compressed natural gas Civic getting an Alternative Energy Award of the Year…. was it wrong of them to give the car an award? Perhaps you think it was Gary’s friends that influenced the award? So many are looking at natural gas as a clean energy source, are they all wrong?
We out here in Washington State have made rather huge investments in Wind Power, it has been a night mare to make use of this power because the gird is no battery, it is a realtime power drain and we need realtime energy to satisfy the need. The wind turbines make their highest energy production during the spring, exaclty when our hydro power peaks, and decisions are made to turn excess water flow into energy or spill it over the dam.. Hydro is a fraction of the cost, and some think those who buy power should have a right to chose between green hydro, or far more expensive wind power, recently they have chosen the hydro, and left the turbines to twist in the wind with no one wanting to buy their output. But there are other problems, wind does not always blow, and there are times when the wind goes slack during a period when the turbines are actually selling into the grid. When this happens, it is necessary to have other capacity pick up the ‘dropped’ loads, and this is a very expensive operation. Thsi is gary’s world, and what he likely knows and understands far better than yourself.
Here in Washington State, the media is VERY careful not to talk about the many problems with windpower generation, and at this point, those who operate the wind turbine farms are refusing to pay the traditional penalties when others have to scramble to put other capacity on line to pick up the loads they’ve suddenly dropped. These expenses are real, and someone needs to pay them, what is fair in your mind?
Perhaps, the difference between you and Gary Smith, is he must perform, and perform now, he operates in the real world, and must address real problems.
You mentioned EVs,, most people I know who are giddy over EVs don’t seem to understand that the ‘engine’ is really back in the commercial generating plant, and somehow they ignore all the losses of energy conversion back in the operating plant, and then all the losses across the power grid to their homes. but that’s not all, they ignore the cost of a very expensive charger (that allows you to charge the EV in a reasonable period of time), and more.. It’s all so easy to start their accounting of losses so close to the rear wheels, and of course they assume it’s a 70F day.
But Gary has the ear and mouth of seasoned Electrical Engineers who share other realities with him. He understands that sweltering heat could cause us to consume far more energy to run the AC than it takes to propel the car forward.
As you say.. I could go on and on with the facts, but if you’re a typical greenie, you already know all the answers.. most who visit here are skeptical, of course the opposite is gullible..
The key is investing in what you ‘think’ the answer is. Here’s somethings I suggest you do..
*Move out of Power South’s operating area.
*buy an EV now, if you think they’re the way to go, why not buy two? Did you watch the spoof ‘who killed the Electric car”? the fact is.. the market is not there, and if you haven’t ordered one.. it is you that is killing the Electric car.
*Move your 401K to all green investments.
Yes.. I know, you have facts, so let’s make use of your abilities and examine a windpower site like the ‘show pony’ Wildhorse Wind Farm here in Washington State, what did it cost to build, who got money and how much power did they sell in the last year?
Perhaps you’ll tell me it doesn’t matter what the production is.. cause it’s free wind power right? Let’s keep both feet in the real world, and look at the real numbers, and focus in on the topics we discuss here.. the realities of power production.
Many of us here are hands on, we know the value of doing our own Solar, and our own wind, we know it works when we do it, but many of us realize how perverted and expensive it is when the government gets involved.
George
Perhaps there’s one more comparision we need make. Gary Smith and other members of the CO-OP make decisions with the full understanding that their ability to make a good one has everything to do with >their< survival. They have skin in the game. Let's compare that to the Wild Horse Wind Farm. Are there signed contracts for the generating capacity they have to sell? Do they have the rights to use grid ties, and conduits necessary to transport the energy to the market place? And.. exactly what is a Politician like President Obama most focused on? Your electric rate, or the next election cycle? Gary's comments are normally focused around these realities. Government for the most part is run by Career Politicians who will do near anything to get re- elected, no matter how wrong it is. Afterall, they are attempting to meet expectations of voters who often believe in Tinker Bell and Fairy Dust, and they need promise the impossible to get re-elected at times.
Hey! it’s 12/20/2012
Let’s look back on Power South’s decision, and Gary Smith’s Comments!
Everone seems to be discovering natural gas!
Go ahead.. you can read between the lines.. but this John Stever post is a gem…”gary smith is critical of president Obama, the EPA, and more? My response, most thouhgtful and moral people who know something about energy are… Do you think John Stever gives a rats ass if Amonix was a scam or not? I don’t think so…