The government – Ms. Pelosi’s and President Obama’s – presented a grand plan for green jobs, offering benefits. First, there would be green jobs for the jobless in these times of dire unemployment straits. Second, the jobs would offer the furtherance, if not creation, of a new American industry of green products to be sold on a global scale. Third, the jobs would reduce climate changing pollutants.

 Federal incentives, grants, subsidies and loan guarantees would provide seed capital for green businesses to start production of green energy products, like solar panels. By now we know the jump start incentive didn’t help Solyndra, a solar panel manufacturer that filed for bankruptcy after receiving $528 million in federal loans. Many other green programs – most backed by federal funds or incentives – are also faltering.

 An example is a stimulus program under The Department of Labor’s Employment and Training Administration to “train and prepare individuals for careers in green jobs.” The Office of the Inspector General reports that thus far about $162.8 million has been spent. The program was targeted to train 125,000 workers for green jobs, but only 53,000 have been trained – about 42 percent of target. However, of that percentage only 8,035 have found work after being trained and only 1,033 (less than 1 percent), were still in their green jobs after six months.

 What sort of green jobs did those 1,033 hold? It turns out the green jobs were not necessarily new jobs. In fact, a good number of the green jobs are not new jobs but replacements for positions already existing, according to the House Committee on Oversight and Government Reform. The green jobs include bus drivers since mass transportation reduces the pollution of personal transportation, university professors that teach ecology courses, and Washington Lobbyists that lobby for energy loan guarantees. Are those the green jobs most of you think about?  The Oversight Committee charitably estimates each green job created only costs the American taxpayer $157,000.

 Environmental America, an advocacy group, estimates there are about 24,000 green jobs actually involved in solar manufacturing in the U.S. That is up about 6.8 percent from last year, but the definition of a green worker is one who spends at least half their time in green manufacturing. After all, the solar panel manufacturing process is not very labor intensive with only about 10 percent of the cost derived from labor.  Employment appears to be in jeopardy with the recent flood of cheap Chinese solar panels on the U.S. market.

 The Texas Comptroller reports school districts had granted tax abatements averaging $1.6 million for each new wind energy job but only $166 thousand for each new manufacturing job.

 The Wall Street Journal reports our government has invested $90 billion (yes,with a “b”) on green job creation. The number of real green jobs for that investment look very scant. Maybe California Congressman Waxman and Massachusetts Congressman Markey are right – our problem is that we have not invested enough in green jobs. Only the Government would call that a bargain.

Gary Smith

President & CEO

 There are a number of people in the same situation. My research indicates that about 1 to 2 percent of PowerSouth’s members’ electric consumers have difficulty paying their monthly power bill and have their electric service disconnected (and most often re-connected) from time to time.

 Those people are under constant pressure to keep their household bills current, feed and clothe their families, pay for gasoline to get to work (or look for work) and provide the basic necessities of life. Maybe you know some of those people. Others have lost their jobs, can’t find work, are on disability or are retired on fixed incomes. My heart and yours goes out to the ones we know in these situations. How do they get by month to month? What is their hope for the future? 

 All of which leads back to a couple of basic questions. Is electricity truly a necessity of life? Should all Americans have access to electricity?

 The answer to the first question is easy. Yes, electricity has become a necessity of life. It, along with running water, has become an essence of our lives and our lifestyles. Everything we have and do is either directly or indirectly attributable to electricity. 

 The second question is more difficult. As Americans, it is easy to say we should have access to the biggest and the best, and by and large we do – if we can afford it. But what about those that cannot – those I talked about earlier that have difficulty paying their power bills from time to time? What about their necessities of life?

 The question becomes even more difficult when we have a president who promised during his campaign that “electricity rates will necessarily skyrocket” and “we will increase the cost of fossil fuels to a level that renewable energy will be competitive.” Through Environmental Protection Agency policies and regulations, he is well on the way to fulfilling those campaign promises.

 If that occurs as it appears it will, what about the poor – those having difficulty making ends meet now? With increasing electricity prices, the number of Americans having trouble paying their power bills will increase. Are those Americans to be written off as not important enough to have the benefit of affordable electricity? Will they have to find another job to pay for the necessities of life? What will they have to do without to pay increasing electric bills? These are all very difficult questions that few people have considered.

 I doubt you have considered those questions, even if you are on a fixed income. I think about those issues often, and I don’t know of any easy answers.

 I wonder if our president has considered those questions. Will his answer be that electricity is such an essential element of life that it must be available to all Americans, and if an American can’t pay their power bill, then the government will? After all, those that control energy will control the world. Something to think about.

 We are insulated from dealing with the public. That makes our business much easier than other utilities, including our distribution members, that deal with the public and the issues that come with those relationships. You may not think very much about people who have trouble paying their electric bills each month or who are almost always in the process of being disconnected, re-connected or asking for relief on their bill, but every electric utility has those customers and must deal with those problems every day.

 Those problems are not easy to handle. It is difficult for me to comprehend the anguish a customer service representative deals with in responding to pleas not to disconnect electric service because there are sick people, senior citizens or young children in the house who cannot do without heat or air conditioning. I doubt you have to deal with such disturbing issues every day.

 I try to visit each of our distribution members’ board meetings each year. After a meeting with one of our members last month, a few of us were discussing electric cost issues and the problems some people have paying their monthly electric bills.

 The cleaning crew started cleaning while we were talking, and one of the ladies excused herself for interrupting and addressed the group. She stated she was on disability and had custody of her grandchildren. She said she received just over $400 per month in disability payments. She said she was forced to take the part-time cleaning job to pay her electric bill and other necessary expenses for her grandchildren.

 She said Habitat for Humanity had added insulation to her house, installed new energy-efficient windows and doors, and provided a new heat pump within the last two years. However, her power bill was always around $275 per month and had not decreased very much with her home improvements. She also mentioned that she did not move her thermostat from 73 degrees because she thought moving it would add to her electric bill. We advised her to turn up her thermostat to 78 during the summer and drop it to 68 during the winter to conserve electricity.

 She responded that she would change her thermostat and then asked the question we all knew was coming – what was she to do about her electric bill? That is the question for many people in our communities today. The answer is not easy, if there is an answer at all.

 Electricity is like a Mercedes. If you want it, you have to pay the bill. Otherwise, who will pay? Electric cooperatives only charge their costs plus a small margin to cover future contingencies, so there is no one to subsidize an unpaid bill other than the other electric customers. There are obviously a finite number of delinquent bills a customer base can carry without putting other customers in jeopardy.

 The answer becomes more difficult when you consider that if people can’t pay their electric bills, they get no electricity. If electricity is no longer affordable for people in our great society, what do we do about those who can’t afford it? Do we turn a cold shoulder to their basic needs? These are very difficult questions.

They would eat the fish they caught and gave some away to friends and families. I certainly ate a lot of the fish they caught when I was young.

I started fishing as a teenager, although I don’t remember ever fishing with my grandfather. I think fishing was a much too serious pastime for him to have grandchildren along. My friends and I mainly fished Pickwick Lake on the Tennessee River and caught bream, small mouth bass and catfish. We ate almost all the fish we caught.

I remember the warnings and the signs in the 1970’s about the dangers of eating fish because of high mercury levels. There was even a ban on eating fish from Pickwick because of the mercury levels in the fish. We ate the fish we caught anyway.

We all know mercury is the silver stuff in thermometers, and my mother told me not to bite the thermometer or the mercury would harm me.

Mercury is also found naturally in many places. It is embedded in rock, is in seawater, is vaporized in the air and is found in most substances on the earth, including coal. When coal is burned in power plants, the mercury that is not captured in scrubbers and other environmental equipment is released into the atmosphere where it eventually drops into the oceans and is eaten by small fish that are eaten by bigger fish and ultimately end up on your plate.

The EPA will soon pass regulations to limit the amount of mercury coal-fired power plants can emit. EPA estimates compliance with the rule will cost electric utilities – and ultimately you through your electric bill – $10.9 billion.

EPA’s own statistics show that emission of SO2 fell 71 percent from 1980 to 2010, from a high of more than 17 million tons to just over 5 million tons. Emission of NOx fell almost as much, from a 1997 high of 6 million tons to just 2 million tons in 2010, for a total reduction of 66 percent during that nearly decade-and-a-half stretch.  Looking at even more recent EPA figures, SO2 emission has been cut in half since 2005 and NOx has fallen by nearly as much at 45 percent.

From the publicity, you would think that once the mercury reductions on coal-fired power plants are in place we will all be safe from the ravages of mercury and can eat our fish without worry.

After all, U.S. coal-fired power plants emit around 48 tons of mercury a year, which sounds like a lot. However, forest fires in the U.S. emit around 44 tons of mercury a year, volcanoes and geysers release about 10,000 tons of mercury a year, and cremation of bodies in the U.S. releases around 26 tons of mercury a year. Finally, Chinese coal-fired plants release about 400 tons of mercury a year.  

Dr. Willie Soon, a professor of Natural Science at Harvard University, estimates that U.S. coal-fired power plants contribute less than 0.5 percent of the mercury released into the atmosphere each year. He reasons that imposing billions of dollars of added expense on the nation’s people and economy (remember that almost all additional electric utility costs are passed on to consumers in rates) will do nothing for the remaining 99.5 percent of the mercury emitted into the atmosphere each year.

Federal regulation has become an extremely significant and destabilizing factor in the planning and operation of our power plants in the future.

PowerSouth takes its responsibility as a corporate citizen extremely seriously and is committed to balancing business goals with the environmental, social and economic needs of the communities it serves.

In 2008 PowerSouth invested more than $317 million in environmental air quality improvements to comply with the Clean Air Interstate Rule (CAIR) and Clean Air Mercury Rule (CAMR). PowerSouth installed scrubbers on all three of the units at our coal-fired power plant to reduce sulfur dioxide (SO2) emissions, added Selective Catalytic Reduction (SCRs) to reduce nitrogen oxide (NOx) emissions and reduced our mercury emissions.

SCRs in a coal-fired power plant works much like an automobile’s catalytic converter, which reduces emissions produced by the car’s internal combustion engine. Prior to exiting the car’s tailpipe, exhaust gasses pass through the catalytic converter, where a chemical reaction takes place and the unburned hydrocarbons are eliminated. At a power plant, NOx emissions pass through the SCR catalyst and react with ammonia, converting it into elemental nitrogen and water.

Our scrubbers do a good job capturing mercury, and it appears our coal-fired power plants will comply with the coming EPA regulations as we understand them today. We will do more to comply with EPA’s regulations on mercury emissions if we are required to do so.

However, you should not be fooled into thinking that coal-fired power plants are the root of all environmental evil and that if we could only get our electricity from ‘green’ sources all would be environmentally well with earth. Huge amounts of mercury will continue to be released from other sources. If the EPA would spend more time structuring approaches that balance environmental and economic interests our country, our economy and our people would be much better off. It is clear that EPA remains firmly committed to its position. It is also clear that a number of lawmakers are committed to forcing EPA to stand down.

As we look toward the future, it is imperative that PowerSouth maintain a balanced portfolio of power supply resources and keep a watchful eye on legislative and regulatory developments that could hinder our mission to provide affordable, reliable energy to consumers. PowerSouth believes that energy providers must be active participants when seeking solutions for the future. We support initiatives that maintain our ability to provide the average family the reliable, affordable energy they expect.

With events rapidly shifting, it can be difficult to get a clear sense of what is happening at Fukushima and of what to expect going forward, but I am certain that the situation will have an impact on the future of nuclear power in the U.S.

In the past, President Obama has proposed expanding nuclear power in the U.S. as a green energy source. In fact, the president touted Japan’s push toward nuclear energy at a town hall meeting in 2009. The White House is showing no signs of backing away from nuclear energy. For now.

In light of the unfolding nuclear event, the Obama Administration has asked the Nuclear Regulatory Commission to conduct a safety check on U.S. nuclear plants. Alabama Senators Richard Shelby and Jeff Sessions have pledged support of the continued operation and new construction of nuclear power plants, with additional attention on safety. Nuclear opponents are using the Fukushima plant as a springboard from which to launch continued attempts to eliminate nuclear power in the U.S.

Nuclear power is increasingly viewed as the only realistic alternative for providing large amounts of carbon-free power, with no air pollutants or greenhouse gas emissions. Nuclear power has one of the lowest-cost sources of baseload electricity – to provide around-the-clock electricity.

With demand for electric power continuing to rise and concerns over climate change likely to place more restrictions on the use of fossil fuels, nuclear power plays a key role in PowerSouth’s long-term power supply plan. While it is noble to think that renewable energy sources like wind, solar and biomass are viable resources for meeting future energy needs, when you consider volatile fuel markets and availability in our region, all roads point to nuclear power as the only feasible energy source in today’s regulatory environment.

In 2009, PowerSouth entered a 20-year contract for the purchase of 125 megawatts of nuclear power from the Municipal Energy Authority of Georgia (MEAG) generated at Vogtle Nuclear Units 3 and 4 under construction near Augusta, Ga. The units are scheduled to become commercial in 2016 and 2017, respectively. At press time, construction was progressing on schedule, but recent events have raised questions about possible delays.

The primary question is – will the U.S. continue to support new nuclear construction?

As we look toward the future, it is imperative that PowerSouth maintain a balanced portfolio of power supply resources and keep a watchful eye on legislative and regulatory developments that could hinder our mission to provide affordable, reliable energy to consumers.

Gary Smith

PowerSouth President & CEO

With events rapidly shifting, it can be difficult to get a clear sense of what is happening at Fukushima and of what to expect going forward, but I am certain that the situation will have an impact on the future of nuclear power in the U.S.

In the past, President Obama has proposed expanding nuclear power in the U.S. as a green energy source. In fact, the president touted Japan’s push toward nuclear energy at a town hall meeting in 2009. The White House is showing no signs of backing away from nuclear energy. For now.

In light of the unfolding nuclear event, the Obama Administration has asked the Nuclear Regulatory Commission to conduct a safety check on U.S. nuclear plants. Alabama Senators Richard Shelby and Jeff Sessions have pledged support of the continued operation and new construction of nuclear power plants, with additional attention on safety. Nuclear opponents are using the Fukushima plant as a springboard from which to launch continued attempts to eliminate nuclear power in the U.S.

Nuclear power is increasingly viewed as the only realistic alternative for providing large amounts of carbon-free power, with no air pollutants or greenhouse gas emissions. Nuclear power has one of the lowest-cost sources of baseload electricity – to provide around-the-clock electricity.

With demand for electric power continuing to rise and concerns over climate change likely to place more restrictions on the use of fossil fuels, nuclear power plays a key role in PowerSouth’s long-term power supply plan. While it is noble to think that renewable energy sources like wind, solar and biomass are viable resources for meeting future energy needs, when you consider volatile fuel markets and availability in our region, all roads point to nuclear power as the only feasible energy source in today’s regulatory environment.

In 2009, PowerSouth entered a 20-year contract for the purchase of 125 megawatts of nuclear power from the Municipal Energy Authority of Georgia (MEAG) generated at Vogtle Nuclear Units 3 and 4 under construction near Augusta, Ga. The units are scheduled to become commercial in 2016 and 2017, respectively. At press time, construction was progressing on schedule, but recent events have raised questions about possible delays.

The primary question is – will the U.S. continue to support new nuclear construction?

As we look toward the future, it is imperative that PowerSouth maintain a balanced portfolio of power supply resources and keep a watchful eye on legislative and regulatory developments that could hinder our mission to provide affordable, reliable energy to consumers.

You never see those puzzles anymore, but the saying “connect the dots” is still used to express the process of looking at something and understanding how the image comes together as the dots are connected.

As I read about events in Washington, sometimes I wonder if anyone there ever played “connect the dots.”

This week, Senator Debbie Stabenow, (D-Mich.), proposed legislation that would give car purchasers a $7,500 cash rebate from the government for the purchase of an electric vehicle like the Chevrolet Volt and the Nissan Leaf. She stated, “These vehicles represent the jobs of the future, and the more that are sold, the more Michigan jobs will be created.” The bill follows the White House’s plan to have one million plug-in electric cars on the road by 2015.

Senator Stabenow’s legislation also contains a provision that provides businesses that invest in electric trucks a $15,000 to $100,000 tax credit, dependent upon the size of the truck.

Senator Stabenow states, “This bill provides a tremendous economic potential that will allow Michigan innovation to continue to out-compete the world and create new jobs here.”

And I always thought that out-competing meant to provide a better product at a lower cost. I guess that doesn’t apply in Michigan anymore, and all that is really important now is a large government subsidy that promotes the sale of certain vehicles with our tax dollars. In essence, Senator Stabenow’s bill would take our tax dollars from the South and use them to create thousands of jobs in Michigan. In fact, she is right – more cars sold mean more Michigan jobs created and more of our taxes being sent to Michigan.

Where does the fuel come from to power these new, modern subsidized cars and trucks?  As the senator from Michigan and the White House conjure up ways to promote Michigan jobs through subsidies, the EPA plots to close down coal-fired generation plants that provide about 50 percent of the country’s electricity. If those plants are closed as advocated by environmental groups and EPA Administrator Lisa Jackson, there will not be sufficient electric power to provide electric service as we know it today, much less power a million plug-in electric cars and trucks. Have Senator Stabenow or the White House connected those dots?

Occasionally, when we were doing those connect the dot puzzles, something would happen and we would lose our way, get out of sequence and the picture would make no sense at all. I still remember the frustration and confusion about what went wrong. It is obvious that Senator Stabenow doesn’t know how to connect the dots and make a picture, unless of course that picture is using tax dollars to create jobs for people that can vote for her.

Maybe she knows how to connect the dots after all.

Gary Smith, President & CEO

            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 for most green energy 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.

Gary Smith, President & CEO

Gus Mayer is a fine companion and a patient listener. Today, I was lecturing him on the elections and the changes that are likely – in particular, climate change and renewable energy standards (RES). He was more interested in what we would have for lunch, but was still concerned that climate change will result in him being eaten, or possibly more disturbing, a change in his diet.

With an overwhelming Republican victory in the U.S. House, conventional wisdom dictates that cap and trade legislation to tax and limit carbon dioxide emissions will not pass for at least two years. However, with the change of power in Congress, progressives (they don’t like to be called liberals) have shifted their focus and plan to use EPA regulation and RES to increase the price of energy. Their goals remain the same: increase the price of energy, reduce energy usage and thereby reduce carbon dioxide emissions. The results will be the same as well: increase electricity costs and lose millions of U.S. jobs.

 Renewable energy is popular among Americans, and the progressives give great weight to that support. But that support is limited. The same polls that show support for a national RES also show that 57 percent of Americans are opposed to paying even 5 percent more for electricity from renewable resources. That limitation in support is where the progressives’ plans meet hard economic fact.

The Energy Information Administration (EIA) says that renewable energy costs at least twice as much as traditional fossil-fired generation. For example, EIA estimates the cost per megawatt hour from conventional coal resources is $78.10, but the cost of onshore wind is $149.30; the cost of off-shore wind is $191.10; the cost of thermal solar is $256.60; and the cost of solar photovoltaic is $396.10. All those costs are without the benefit of federal and state government subsidies, but coal and natural gas generation receive no subsidies, either. Additionally, natural gas generation will be equal to or cheaper than the EIA’s quote on conventional coal if natural gas costs remain in the $4 per MBTU range.

If the federal government mandates that 22 percent of electricity come from renewable resources, energy costs will increase substantially. A Heritage Foundation analysis predicted household electricity prices would increase 36 percent, industrial electricity prices would increase 60 percent, national gross domestic product would decline $5.2 trillion between 2012 and 2035, and the U.S. would lose more than 1,000,000 jobs.

If renewable energy was cost-competitive, there would be no need for a RES mandate. As the most critical input to our economy, forcing higher electricity costs will increase the cost of production. However, as opposed to a normal tax, the government will obtain no revenue from that increase. The costs go up and only the renewable energy providers – electric utilities – will benefit. In the end, our economy will suffer when industrial production is shifted off-shore where renewable mandates are not in force. We will gain nothing from the shift, and the progressives’ efforts to save the world will again be in vain.

After a while, Gus Mayer lost interest and went to sleep in the sun, dreaming of juicy cheeseburgers. When I woke him up, he wanted to know if there will be a requirement that a minimum amount of food come from the magic windows at fast food restaurants. They are his favorites, and he would hate for renewable mandates to put them out of business.