Public Utility Commission Role

Unique to the United States, Public Utility Commissioners (PUC's) play a pivotal role in how energy, and to some extent environmental, policy is diffused to the ultimate consumer, the ratepayer. They fulfill the role of gatekeeper to ensure that the most affordable energy rates are passed on to consumers, and that changes to the infrastructure do not cause deterioration in service. Part of their role is to help prevent blackouts, brownouts, and price spikes without unduly burdening either the provider or consumer. That's an unusual role, one that is seldom replicated in other parts of the world. Interestingly, this unique position has also been almost solely responsible for challenging some of the technical innovations being proposed as a solution to reducing CO2 emissions from new power projects. Take for example, Integrated Gasification Combined Cycle, or IGCC. There are pro's and con's about the different technologies for burning coal. Supercritical plants are well known technology with reasonably well understood pricing structures; IGCC's have the capacity to reduce emissions from all pollutants to a greater extent, including CO2, but there are only a handful of such plants operating globally that generate electricity, and nearly all received substantial subsidies in one form or another to construct the facility. Whatever the longer-term benefits may be for one technical choice over the other, in the end, the PUC will usually side with a technology that has the lowest delivered cost to the consumer—all other factors taken into consideration.

The cost issues, and complexity of the IGCC, have taken a toll on projects being developed. At one point, there were proposals to build perhaps as many as a dozen plants in North America. Many were suspended, and by 2008, only one plant was under construction and expected to be commercial within a few years. Uncertainty over CO2 regulations for coal-based generation turned out to be a new concern. Even deep pockets are sometimes not enough to push a project forward. Several federally subsidized projects were found to have such burdensome costs that had great difficulty moving beyond the initial engineering evaluation stage.

Slicing it a bit deeper, while the IGCC may have had a difficult developmental schedule, the gasification component of the IGCC has been much more favorably received. First, it doesn't take a review by state commissioners to construct a gasification plant, and second, they are almost exclusively being used to make something other than electricity. Examples include gasification of pet-coke, production of hydrogen to make ammonia, or production of syn-gas to manufacture methanol. Because of that, gasification may still offer a route to utilization of coal (by converting coal to SNG) and using the most efficient power generation available (combined cycle or combined heat and power) to produce power. Since the CO2 must be extracted at the point of SNG production, this is effectively a "carbon-capture ready" plant that could be put in place today. As shown earlier, the combined cycle gas-fired technology produces less than one-third the CO2 footprint of a comparable coal plant. In summary, while IGCC may be an answer to how we use coal for power, the tools are in place to rearrange these components while still having the option of capturing and sequestering CO2.

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