On September 11, 2003 the three Commissioners of the Public Service Commission of Wisconsin (PSC) will meet to discuss whether to approve a 150-Megawatt (MW) power plant on the campus of UW Madison. They expect to issue their decision a week later, on September 18. Most observers believe the plant, known as WCCF (West Campus Cogeneration [1] Facility), will be approved.
The plant will be on the west campus, on Walnut Street, on a 4 ½ acre field next to the existing university heating and cooling plant. It can power 90,000 homes, which is roughly the residential load of the city of Madison. It will also produce steam to heat campus buildings, including UW and VA hospitals, the US FPlantorest Product Lab, as well as dormitories and the Unions. Madison Gas and Electric (MGE) will sell the electricity to its customers or to other power companies. [2] MGE will sell the steam to UW.
Proponents call WCCF a good deal. Notice that although UW provides the real estate and will co-own the plant by putting up half the construction costs, it still must buy steam and electricity from MGE. It turns out that a state-hired consultant found that UW could have saved some $51 million in today’s dollars by building and operating its own smaller, 45-MW cogeneration plant. [3] That works out to 24.7% less money over the life of the plant than what the state will pay under the MGE scenario. The smaller plant would provide the same heating and cooling capacity as the MGE plant. Its electrical capacity would be appropriate for the needs of the campus, rather than MGE’s larger customer base.
Moreover, a state analysis has estimated that the price [4] of steam from that small, UW-owned plant would have been $0.19; it will be $5.43 from the MGE plant. This astonishing differential corroborated earlier findings [5] from a group of UW graduate students, who showed that UW will be paying MGE in excess of $1 million per year more for steam than it should. Neither of these steam studies has been publicly refuted by MGE.
That means that the heating costs for the hospitals and federal facilities and dormitories will be much higher in coming years than they could be. These excess costs will have to be absorbed either by the state or passed through in the form of higher heating bills for steam consumers; the latter implies higher hospital fees and student dorm fees. Note the double whammy: the university needs more tuition money from students at the same time that it is willing to overpay for its utilities.
For the stockholders of MGE it’s a great deal: MGE is asking the PSC to grant MGE investors a 12.9% return on its investment in WCCF.
WCCF will draw up to 3 million gallons of water per day from Lake Mendota, raise the levels of fine air particulate matter (known as PM2.5) above 95% of the limit established in the Clean Air Act [6] , and produce noise levels that would violate standards in other localities, such as the state of Illinois. [7] A smaller, UW-owned cogeneration plant would be environmentally more benign in all regards.
Both the soil and groundwater at the construction site are contaminated. For example, the groundwater contains PCE from a former nearby dry cleaning business in amounts exceeding standards for safe, human contact. Unfortunately, neither MGE nor the Department of Natural Resources (DNR) has proposed a viable means of removing contaminated groundwater during excavation. This water cannot simply be returned to state waters such as Lake Mendota or Willow Creek. [8]
Construction of WCCF will also necessitate laying a mile-long water intake pipe along the Lakeshore Path. Construction will displace vegetation and disrupt usage of the path. It will also necessitate dewatering, but the DNR has not said whether that water contains contaminants and requires special handling.
Students and staff on the Madison campus often notice energy inefficiencies – overheated rooms in winter, excessive air-conditioning in summer, wasted lighting, and so on. In comparison to other universities, UW has not invested heavily in conservation. Nor is either UW or MGE a leader in renewable energy; MGE last invested in wind generation in 1999 and plans no further wind generation until 2009. More balance is warranted – more conservation and renewable energy, and less fossil-fuel consumption, especially at WCCF efficiency levels which are much lower than what well-balanced cogeneration plants achieve.
It’s a simple matter of money … and connections.
Documents from various investigations, including the indictment of former State Senate Majority Leader Chuck Chvala, show that MGE, its subsidiaries, and its key employees, have made political contributions in excess of $370,000. Even though MGE is a local company, most of this money was sent to Democratic party organizations outside of Wisconsin, apparently to circumvent state campaign finance laws. Such money is then re-directed back to the states from which it came. Money, like electricity, is fungible. You can’t pinpoint whose dollar actually arrived back in Wisconsin; you only know that the amount of money that left is about the same as the amount that came back. [9]
One apparent byproduct of MGE’s corporate largess is a remarkable amendment to last year’s state budget that explicitly required UW to negotiate with MGE for a 150-MW cogeneration plant. Thus, rather than opening the problem of campus energy needs to an open, competitive solution, the Legislature awarded the job outright to one company, MGE.
The University is itself entwined in this political and corporate web. UW Madison Chancellor John Wiley, who has in the past blasted environmentalists for causing energy shortages and is the university’s most outspoken advocate for WCCF, appointed Al Fish to shepherd WCCF through the approval process. Mr. Fish is well connected to the Democratic Party: his wife is Governor Doyle’s chief-of-staff and former campaign manager.
Moreover both the President of UW Hospitals and one of UW’s Regents are on MGE’s Board of Directors, and UW’s System President is on Alliant Energy’s Board of Directors (Alliant will partner with MGE to build WCCF).
Proponents of WCCF cite a critical need for more electric generation in Madison; MGE officials frequently note that 85% of Madison’s electricity is “imported.” A closer look shows that the bulk of that is imported from its own plant about 35 miles away, not some distant out-of-state source. Moreover MGE can already generate nearly 60% of its needs right in the immediate Madison area. It doesn’t switch that capacity on unless it needs to, for good reason – “imported” electricity costs less.
Another concern is, of course, reliability. Doesn’t the country need more power plants to prevent blackouts? It turns out that blackouts are seldom the result of a capacity problem. The trigger is nearly always a distribution problem … the grid. These include large-scale, cascading grid failures such as occurred in the recent northeast blackout. More frequently they are due to local disruptions caused by falling limbs, lightning strikes, or squirrels in transformers. Regardless of whether WCCF or a small, UW-owned cogeneration facility were to be built, deficiencies in the grid are a separate matter and the frequency with which you or I experience power outages is unlikely to change.
UW is on the verge of becoming the only institute of higher learning in the country that has ever relinquished prime urban real estate to a commercial concern for a power plant large enough to serve 90,000 households. The plant would be more expensive than the alternatives for everyone – state taxpayers, students, even MGE customers. It would fail environmental standards in Illinois and California. Will the PSC make the right decision or succumb to political and corporate influence?
Friends of Responsible Energy (FORE) promotes responsible energy solutions. If you would like to volunteer skills to FORE’s efforts or contribute to its legal fund, please contact the author.
Chamond Liu
cl@foremadison.org
www.foremadison.org
[1] “Cogeneration” means the capture of excess heat energy from electric generation for use as steam.
[2] When a power company sells electricity to other power companies, you can’t say exactly which watt came from which power plant. Electricity is “fungible.” This means that one watt looks like any other watt and you generally can’t know exactly whether it came from WCCF or another MGE facility.
[3] Documents show that UW, i.e. the Chancellor’s Office, and MGE subsequently demanded that the consultant revise the cost-savings down to $17 million by inputting unrealistic assumptions about the prices of electricity, natural gas, as well as the special rates that MGE charges UW for electricity.
By the way, cogeneration plants have been built on large and small campuses across the country. These plants are designed for campus steam and electric needs and average 13-MW in size. A well-balanced design is capable of operating at 80% to 90% efficiency; the MGE design is tilted toward electricity generation, MGE’s main business, and will operate at 45% to 70% efficiency.
[4] Per MBtu or Million British Thermal Units. The analysis was summarized in an email that the PSC, granting an objection by MGE’s attorney, did not allow into the hearing record.
[5] Madison Capital Times, April 23, 2003
[6] The area already exceeds the stricter California standard for PM2.5 emissions. PM2.5 is associated with increased incidences of asthma and lung and heart disease.
[7] Madison’s own noise ordinance and a proposed new version are weak and antiquated. They rely on averaging sounds across the frequency spectrum, which is appropriate for white noise, such as an air conditioner. But they are also therefore insensitive to noises at specific frequencies, such as hisses or rumbles, which are the kinds of noises that particularly disturb humans.
[8] The state environmental agency in Connecticut is under fire for not disclosing contamination at and near a power plant construction site in Milford to residents and construction workers. At least one worker has filed a claim for contracting a rare form of cancer from the contamination. Similarly, Wisconsin’s DNR failed to disclose the harmful levels of contaminants in the EIS (Environmental Impact Statement) for WCCF.
[9] This process, otherwise known as money laundering, is being investigated by the FBI in two states, Wisconsin and Maryland.