Updated 3/09/03 ‚ Incorporates information provided by MGE and UW (MGE/UW) on 2/06/03.
How would the plant affect air quality?
MGE/UW is making efforts to comply with the Clean Air Act. Nevertheless, the plant will degrade air quality for area residents, school children, and hospital patients. Of the pollutants regulated by the Act, particulate matter (PM) poses the greatest health hazard from this plant; PM emissions are associated with higher incidences of asthma. According to DNR air model results revealed on 22 January 2003, PM emissions from the proposed plant were expected to violate the Clean Air Act. MGE/UW has responded by raising the planned stack heights.
I have heard that the plant relies on jet turbines. Arenít they noisy?
They are, but MGE/UW plans to dampen most of the noise with sound insulation and 100 foot walls. Predicting precise noise effects is notoriously difficult; but vibrations and background noise from either the turbines or the cooling towers are likely to be felt or heard in surrounding areas.
What about startup events?
We have been told that startup events will sound different, may occur intermittently, possibly once a day or once a week, and could last one to two hours. Emissions will also be different during these times. We do not know what any of these differences are likely to be.
What about water for the plant?
The plant would draw up to 3.3 million gallons of water per day from Lake Mendota, transported by a new pipe to be constructed along the Lakeshore Path. Most of this water will be lost to the atmosphere, which may contribute to local fogging and icing, and some will be recycled downstream into the watershed. Currently the leading options for mitigating water loss, as proposed by the office of County Executive Falk and endorsed by MGE/UW, are (1) Use of underutilized wells during low-water conditions to draw water for reintroduction into the watershed, and (2) Infiltration of storm water back into the aquifer. Because water source and mitigation plans have changed many times before, these proposals should not be considered final.
I have heard that there are urban plants like the MGE/UW proposal in Germany and Philadelphia.
The Berlin Mitte plant replaced a 33-year-old plant that had been violating German pollution standards; the new plant was a net environmental improvement. The 170 MW Grayís Ferry Cogeneration Project also replaced an older facility and therefore lowered Philadelphiaís regional emissions. These examples illustrate what MGE might contribute to Madisonís environment if it replaced its own 44-year-old Blount St. plant. The trend in developed nations is to clean up urban air, not degrade it as the current MGE/UW proposal would do.
What does 150 MW mean?
As a rule-of-thumb, one megawatt (MW) meets the average electric demand of about a thousand households. (Peak demand, typically in summer, is roughly 50% higher than the average.) Therefore the proposed plant satisfies the average residential demand from about 150,000 households or the peak demand from about 100,000 households. Madison has about 90,000 households.
But MGE/UW says MGE needs this power.
According to MGEís own data for last summerís peak season, their net capacity considerably exceeded their net demand: 812 MW of capacity versus 641 MW of demand. The share of that capacity provided by MGE-owned facilities (647 MW) also exceeded demand. MGE is pursuing additional sources as well. For example, it has an option to own 150 MW from the planned Oak Creek facility, which is currently undergoing review.
Why then does MGE/UW say that Madison ìimportsî 85% of its electricity?
We do not know. The data above show that MGE is capable of producing all the electricity it needs. Moreover, the 200 MW Blount St. plant in Madison can account for 31% of MGEís net demand. Whatever MGE/UW may mean, it is not unusual for cities to ìimportî electricity from beyond the city limits because of pollution concerns and land costs.
How efficient is the proposed plant, and why should I care?
Efficiency refers to the amount of energy contained in a fuel that is actually put to use. Higher efficiency is better for the environment ‚ because fewer byproducts are emitted ‚ and for ratepayers, because more benefit is extracted from the fuel. The efficiency of this plant ranges from 45% to 70%.
Why the range?
This plant can capture otherwise wasted heat in the form of steam and use it to heat campus buildings. When this occurs, the plant is said to ìcogenerate.î At these times it operates at 70% efficiency. When it discards the steam, which it will do outside the heating season, it operates at 45% efficiency.
But MGE/UW claims it will cogenerate 100% of the time that it produces steam
This is correct, but it is as meaningful as saying that a car moves when its wheels roll. The important question is how often during the year useful steam will be produced. Estimates have varied from 0% to 20% of the year, including an estimate of 12% derived from MGE itself. In other words, cogeneration from the MGE/UW proposal is limited to the heating season. The rest of the time this plant operates at the lower efficiency level ‚ wasted steam and no cogeneration.
Isnít it possible to achieve cogeneration efficiencies year round?
Yes. A well-designed cogeneration plant makes productive use of steam in summer by using it to drive steam-driven chillers to produce chilled water for air conditioning. Unlike the MGE/UW design, the steam from these facilities is not wasted in summer. Air conditioning is a byproduct. Such plants can operate at 90% efficiency for most of the year.
How does the MGE/UW plant provide air conditioning?
It produces chilled water through electrically-driven chillers. Thus, instead of getting air-conditioning as a cogenerated byproduct, the plant consumes additional electricity to run the chillers.
Doesnít UW need this plant?
UWís principal near term need is not steam and electricity, but chilled water, for which a temporary chiller could be quickly erected. This proposal is not a good way to meet this need, because as we have seen above, chilled water is the least efficient product of the UW/MGE proposal.
Does UW benefit financially from this partnership with MGE?
Not in comparison to alternative solutions. UW doesnít own the electrical output from the plant; it will purchase it as a retail customer from MGE, much as it does today. The actual financial arrangements are complex and have taken years to negotiate, but consultants hired by the State Department of Administration (DOA) reported on March 7, 2003 that the present value of the lifetime costs of this plant to the State of Wisconsin would be higher than the costs of a 45 MW cogeneration plant designed around UWís actual needs. On the other hand installation costs of the 150 MW proposal were estimated to be lower than for the smaller alternative.
Regardless of cost, why favor a smaller plant?
Smaller, footprint, lower emissions, less water consumption, less noise and vibration, less danger from explosions or leaks, higher efficiencies of a balanced cogeneration design, and a more transparent ownership arrangement than the permanent presence of an investor-owned utility on prime state real estate.
Why do MGE/UW say that their proposal is $20 to $40 million less expensive?
MGE/UW have used this language to mean that the 150 MW proposal is less expensive for ratepayers than if MGE and UW built separate facilities. They have not provided details about those separate facilities, but they imply that one would be an electric generation facility for MGE and the other a heating and cooling plant for UW rather than a true cogeneration plant.
What is the effect on MGE if UW were to build its own, smaller facility?
Because UWís current peak demand is about 57 MW, and it already has 10 MW available at its Charter St. facility, a 45 MW cogeneration plant has the potential for making UW nearly self-sufficient. UW could go from being MGEís largest customer to a small institutional one. At the same time, demand for MGEís electricity would fall by the same 45 MW, alleviating MGEís alleged crisis and its need to build more generating capacity in the immediate area. It must be said however that a reduction in demand and the consequent reduction in revenue may not be deemed attractive by MGEís investors.
How did this proposal come into being?
A capsule history: In 1996 the Madison campus completed a 2 year, $2+ million comprehensive Master Planning process, involving faculty, staff, students, consultants and the community. Among the planís conclusions was that modest utility expansion would be needed at the Walnut St. location if the campus were to be fully built out. The university also committed to involving all participants as further growth was contemplated. It has since been revealed that thereafter UW & MGE closed the process and over the course of 3 years privately developed successively larger power plant plans, culminating in the present 150 MW proposal. Over the same timeframe MGE is known to have paid out $150,000 in contributions in response to discussions with then State Senate Majority Leader Chvala. As documented by Representative Black, Senator Chvala and then State Assembly Speaker Jensen, both now under felony indictment, insisted that a budget provision be written, requiring UW to negotiate a 150 MW power plant with MGE. Although campus cogeneration plants are normally built alone or in partnership with cogeneration specialists, including subsidiaries of firms like General Electric, no competitive bidding is known to have occurred during this timeframe.
I have heard that MGE/UW are jointly evaluating the alternative to the 150 MW proposal.
Yes, UW officials confirm that MGE and UW are participating in comparing the universityís own 45 MW cogeneration plant with the 150 MW proposal.
Isnít MGEís participation in the evaluation a conflict of interest?
It appears to be. Moreover, none of the parties involved in the Master Planning process appear to be participating in the evaluation, although the effects of the decision go well beyond UW and MGE.
Are there any other ethical considerations?
(1) The Board of Regents approved the 150 MW proposal in June, 2002; at least two Regents have strong ties to the utility industry; one sits on MGEís Board of Directors. (2) The October 23, 2002 DOA report comparing the 150 MW proposal unfavorably to a smaller alternative was kept quiet and first acknowledged by a DOA official on January 14, 2003. (3) MGE and UW officials are known to have pressed for DOA signing of the agreements finalizing the financial terms of the 150 MW proposal just prior to the changeover between the McCallum and Doyle Administrations. (Representative Black is among those who successfully intervened to postpone the decision until the new administration could assess the matter.)
Isnít it important to build a facility to support UWís building plans immediately?
In view of the Stateís budget crisis it is unlikely that all current building plans will proceed on schedule. Also, as stated earlier, only chilled water is of concern in the near term. This is an opportunity to pause for a thorough and impartial review of campus utility needs. On January 30, 2003, Representative Black became the first public official to request a full re-evaluation of campus needs and to seek an environmentally and fiscally responsible solution to meet those needs. To facilitate that process he and State Senator Risser are submitting legislation to repeal the MGE budget provision described above.
UW officials have said that they fear that stem cell lines will die if reliable power is not available.
Load management of utilities and backup facilities are normally designed to keep critical facilities running, at the cost of temperature fluctuations or brownouts in less critical facilities like gyms or classrooms. The death of a stem cell line is therefore far more likely to result from faulty facility design than from lack of power.
Doesnít more power mean more reliability?
No. Engineers who deal professionally with power failures rate events like ìsquirrels in transformersî and lightning strikes as much more common causes for outages.
Could UW do a better job of conservation?
Yes, as could the rest of the Madison community. But we are not able at this time to quantify the potential.
What are the plantís dimensions?
The site covers 4.5 acres, or about four football fields. The building itself has walls as high as ten stories, and twin smokestacks of about 17 stories. It is about 400 feet from a residential neighborhood. It will be a prominent feature of the skyline in its immediate vicinity, as well as from Picnic Point, other Campus Natural Areas, and Lake Mendota.
How will UWís $80 million share of the proposed plant be financed?
It will be part of the state budget. UW officials have given us conflicting accounts of the details, so we do not know how much will come from increases in the Madison campusís annual utility budget and how much will come from the capital budget. In any case, the amount will be amortized over 20 years. Note that taxpayers statewide, not just in Madison, pay these bills.
Will UW need to borrow money from MGE to finance the 150 MW proposal?
At the moment it is uncertain. Earlier, MGE offered backup lending to UW for at least $10 million at 14.5% interest. The final rate to be offered to UW has not yet been set by MGE, but it is expected to be between 9% and 12%. (The prime rate, which is the rate at which banks lend money to their best customers, stands currently at 4.25%.) MGE/UW say that they do not expect UW to need this financing, but they also have not specified an alternative source.
What are the pros and cons of natural gas fuel for this plant?
Natural gas is the cleanest fossil fuel, but its price is volatile, having ranged in the last 3 years from about $2 per million Btu to $14 per million Btu. Moreover, some observers anticipate a surplus of large, natural gas power plants coming online in the next few years. The consequential increases in demand and cost for natural gas could make such plants economically less attractive than their proponents currently forecast.
Isnít MGE a ìregulated utility?î
Yes and no. With the advent of deregulation the distinction between regulated utilities and energy companies has become increasingly blurred. Nowadays utilities are generally subsidiaries of energy holding companies. In this case the utility MG&E (Madison Gas & Electric Co.) is a subsidiary of the holding company MGE Energy Inc. (ticker symbol MGEE). The financial performance of each subsidiary of MGE Energy Inc. affects its share price and is important to its investors across the country.
Will the City of Madison have anything to say about this plant?
If the State Public Service Commission (PSC) approves MGEís application, the R-5 zoning for this land will automatically be overruled to allow the plant to be built. The Cityís jurisdiction is limited to enforcing local building codes.
What about the PSC?
The PSC considers many aspects of power plant proposals, including their environmental effects, effect on ratepayers, esthetics, and safety. However it does not rule on several other aspects, such as the appropriateness in this case of allocating valuable University land for outside electric generation. The PSCís final decision will be made by three Commissioners, two appointed by Governor Thompson and one by Governor Doyle. In recent years PSC rulings have generally favored utility companies.
What other approvals are involved?
We know of several checkpoints. The next budget checkpoint may be the March 19 meeting of the State Building Commission, on which Senator Fred Risser sits. The Building Commissionís decision will in turn be input into the state capital budget. There are four financial contracts necessary for the project that have not yet been signed by the State Department of Administration and the Board of Regents. And finally, at an as yet undetermined date, the PSC will hold a public hearing.
Is there anything I can do to affect the outcome?
Because budget decisions will occur in the immediate future, you may consider contacting elected officials or other decision makers. A few words now may matter more than waiting to frame a detailed letter later on. Also, this FAQ can cover only a small fraction of the questions or concerns that you may have. You should not hesitate to forward the rest to Carol Stemrich (carol.stemrich@psc.state.wi.us) at the PSC; she is the case coordinator for this project. Your feedback will play a role during the DEIS (Draft Environmental Impact Statement) review period.
Who are some of the decision makers?
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Governor Jim Doyle [Clean govít & financial] (608) 266-1212 |
Burnie Bridge [Environmental & financial] Chairperson, Public Service Commission burnie.bridge@psc.state.wi.us |
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Marc Marotta [Budget & MGE contracts] Secretary, Department of Administration |
Guy A. Gottschalk [MGE contracts] President, UW Board of Regents |
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Alan Fish [Any aspect] Associate Vice Chancellor Facilities Planning & Management afish@fpm.wisc.edu |
John Wiley [Any aspect] Chancellor UW Madison Campus jdwiley@facstaff.wisc.edu |
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State Senator Fred Risser [Any aspect] (608) 266-1627 |
Representative Spencer Black [Any aspect] (608) 266-7521 |
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Representative Terese Berceau [Any aspect] (608) 266-3784 |
Kathleen Falk [Environmental]Dane County Executive (608) 266-4114 |
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This FAQ was prepared by Friends of Responsible Energy. The information is believed accurate as of 3/09/03. Please send corrections and additional questions via email to energy@foremadison.org.