NOT IN OUR BACK YARD, SENATORS!
FORTY QUESTIONS!
Dear Editor
The Virgin Islands Daily News
My letter published January 26 in the Virgin Islands Daily News has been criticized for being too technical and not written for the lay reader. This is a valid point. It was a letter written to VI Senators and the Governor covering a detailed spreadsheet. My letter presented our conclusions from careful consideration of data made public to date by the VI Water and Power Authority (WAPA), VI Waste Management Authority (VIWMA) and Alpine Energy Group LLC (Alpine). I had hoped to get specific data or referenced facts to support Alpine-projected costs and savings.
Alas, such has not been the case. James Beach’s January 28 Op-ed in the Daily News offered more generalities, doublespeak and obfuscation. So I decided to take a different approach. Recalling the game of 20 questions I played as a child, I set out to ask direct questions to see if WAPA, VIWMA, Alpine or the Governor could provide direct and specific answers. Sadly, my list grew rapidly from 20 to 40 questions. To make the material more manageable for the readier, I have divided it into four “Open Letters” to WAPA, Alpine Energy Group, VIWMA, and the Governor.
This Open Letter to the VI Water and Power Authority represents the first in a series of four letters addressing questions related to the proposed construction of petroleum coke/municipal solid waste burning power plants in the US Virgin Islands.
How did Alpine get prequalified for a contract by WAPA in the first place? Alpine appears not to have prequalified under at least four of nine mandatory criteria, all of which the “respondent must pass to prequalify” according to WAPA’s request for proposals (RFP):
Respondent has demonstrable experience designing and constructing generating facilities similar to the one being proposed.
Respondent has demonstrable experience operating generating facilities similar to the one being proposed.
c. Respondent is proposing a non-oil based solution.
d. Solution is commercially proven. If new technology, respondent has provided valid proof that they can mitigate the risk of new technology.
It is our understanding that Alpine has never designed, constructed or operated a power plant, much less one similar to the one being proposed; and that neither the burning of petroleum coke in combination with municipal solid waste (MSW), nor the processing of fluff® or pelletized refuse-derived waste (PRDF) by the WasteAway® process are commercially proven.
How does combustion of petroleum coke even qualify under the RFP, which was limited to non-oil based alternatives? WAPA Executive Director, Hugo Hodge claims that petroleum coke, a crude oil derivative, is not an oil-based fuel. According to this line of reasoning, Corn Flakes is not a corn-based breakfast cereal since it is made from compressed corn flour, not corn kernels.
Why does WAPA think it is a good idea to sign 20 to 25 year, $2 billion to $3 billion dollar, deals for about one-third the territory’s peak energy needs, with a company that has never designed, built or operated a power plant; with an installed cost of production capacity 3 to 4 times the cost per megawatt (MW) in the US; when cheaper, cleaner, healthier, quicker-to-come-on-line, renewable energy alternatives are available?
Why does WAPA refuse to provide a copy of their systematic analysis of alternative energy options for public review? This refusal gives the appearance that WAPA does not want the public to see the process used to select among RFP bidders. According to Mr. Hodge, WAPA cannot disclose this information because the RFP bid process is still open for an additional 10 MW of solar energy. I applaud WAPA for taking bids on 10 MW of solar energy, but if WAPA is issuing a new RFP for this energy, the new bid process should not limit full transparency on the RFP under which Alpine was awarded two power purchase agreements (PPAs).
Has WAPA collected any of the $1 million dollars in penalties Alpine owes for failure to meet deadlines under the PPAs? Alpine is already behind schedule on meeting PPA milestones. Alpine is required to apply for 13 Construction Permits and Approvals within 90 days of signing each PPA. The penalty for not applying for these permits is $5,000 per day under each PPA. Now late by 100 days, Alpine owes WAPA $1,000,000 in damages.
What assurance do we have that WAPA would comply with Clear Air Act permit conditions issued by the US Environmental Protection Agency (USEPA) or VI Department of planning and Natural Resources (DPNR)? WAPA’s track record is not that great. Under a Clean Air Act permit for the St. Croix Estate Richmond power station, WAPA is required to self monitor and maintain records of air emissions from the four gas turbines and report quarterly to DPNR. A DPNR report I reviewed found WAPA was not in compliance with permit conditions and not to have been “in continuous compliance during the evaluation period.” Another report found 18 violations of performance testing, monitoring and reporting conditions. Yet another report found that “none of the (recording and reporting) conditions were complied with by WAPA” for any of the four units. These reports raise questions about WAPA’s ability to comply with Clean Air Act permit conditions.
Why did WAPA use a less than 1% annual inflation factor for petroleum coke prices in forecasting fuel costs to ratepayers, when prices to US electric utilities buying petroleum coke rose 11.5% per year between 1998 and 2008 according to the US Energy Information Administration? We question the methods and assumptions used by WAPA to reasonably predict costs to WAPA ratepayers and VI taxpayers under the Alpine deals.
Why does Hugo Hodge refuse to talk about the option to bring energy to St. Thomas via a cable from Puerto Rico? It was reported in October 2009 that there is a “positive dialog” between WAPA and Puerto Rico’s Electric Power Authority about delivery of energy to St. Thomas via a cable for $40 – $60 million in capital investment. We understand this dialog concerns 20 MW of energy for St. Thomas, i.e. an installed cost of $2-$3 million/MW, compared to nearly $8 million/MW installed cost for the 49 MW rated Alpine plants.
Why are WAPA ratepayers being asked to pay nearly $8 million/MW for new energy generation when the Jacksonville Energy Authority (JEA) rejected $2.5 million/MW as being prohibitively expensive? Actually, calculating installed energy cost on the basis of 49 MW does not reflect the cost for energy to be delivered to customers. According to the Alpine PPAs, the guaranteed outputs of energy are 36.4 MW in non-Major Overhaul Years and 32.7 MW in Major Overhaul Years (years boilers are down 56 days for scheduled maintenance). Calculating on the basis of guaranteed output, the installed cost is $10.5 million per MW delivered in the best of years (not accounting for unscheduled outages).
Why couldn’t 27 MW of the rated 49 MW of energy required for St. Thomas and St. Croix be provided by thermal solar energy? According to the guaranteed output schedules of the Alpine PPAs, 21 MW of energy is to be delivered during On-Peak hours during Non-Major Overhaul years and ~19 MW during On-Peak hours in Major Overhaul Years. The 19 – 21 MW of guaranteed output corresponds to ~27 MW of the 49 MW generation for which the two Alpine plants are designed. On-peak hour energy is generated during hours of the day when the sun is shining and solar thermal arrays could provide reliable energy without wide fluctuations due to passing cloud cover to meet this on-peak hour energy demand.
Why isn’t WAPA proposing to meet any of the required 49 MW with improved energy efficiency or conservation? Transmission line improvements and new substations are proposed for St. Croix at a cost of $20 million over and above the Alpine $440 million contracts. According to JEA, reducing energy demand through increased energy efficiency and conservation is the cheapest way to meet energy needs. I would add that improved energy efficiency and conservation is likely the fastest solution, as well as the cheapest.
Why is the cost to Alpine for new carbon dioxide (CO2) regulations capped at $250,000 per year under the PPAs, when a conservative figure of $20 per ton for CO2 regulations would cost WAPA ratepayers $6.5 million per year? Forty dollars per ton of CO2 emitted into the atmosphere would cost WAPA ratepayers $13 million/year with Alpine’s annual liability still capped at $250,000.
Why does Hugo Hodge refuse to guarantee that the WAPA Alpine deal would result in a shutdown of antiquated and polluting Estate Richmond and Randolph E. Harley boilers? Part of the reason for his noncommittal statements may simply reflect the fact that St. Croix boilers have a generating capacity of 29.1 MW, much more than can be displaced by a 16 MW Alpine facility. Likewise, 33 MW of Alpine generated energy on St. Thomas cannot replace the 55.4 MW of generating capacity of WAPA Randolph E. Harley boilers. How much energy generation from No. 6 oil fired boilers would be displaced by Alpine generated energy on St. Croix and St. Thomas?
Are we prepared for fly ash spills? The Alpine plants would generate a volume of fly ash that would fill 2,000 40-foot containers every year? Two proposed 10,000 cubic foot fly ash silos represent two days of fly ash storage capacity at Alpine’s St. Thomas site. With such limited on-site storage capacity, it appears Alpine will move fly ash to a temporary storage site then on to a permanent storage site several times per week. Where are these sites? How will fly ash be moved? By truck? By boat? Through what neighborhoods or natural areas will it be transported? We really have very little information about the proposed handling or disposal of fly ash to be generated at the two Alpine plants.
If WAPA is truly concerned with relieving ratepayers from dependence upon crude oil before a return to ~$150/barrel prices, why did they select the bid with the second longest time to energy delivery of the 14 respondents to the RFP? With no delays, Alpine would not deliver energy from these plants until the year 2013. Yet, Alpine is already 100 days late on their first milestones. According to time schedules in original bids, 10 other RFP respondents could have provided energy by 2011 or 2012.
If WAPA is truly concerned with energy security and independence from international crude oil suppliers, why did they pursue an energy alternative dependent upon petroleum coke, a product generated from the refining of international-sourced crude? Certainly the cost estimates of this deal assume that the petroleum coke to be burned by Alpine will be that generated by HOVENSA in the refining of Venezuelan crude. Has anyone been following the news out of Venezuela about the unpredictable behavior of that country’s leader?
What is the bottom-line cost to the ratepayer over 20 years or 25 years for Alpine-generated electric energy? How does this projected cost compare to that for reducing energy demand through improved energy efficiency/conservation; supplying baseload energy via cable from Puerto Rico, Nevis or Saba; energy generation from low temperature geothermal or ocean thermal, wind or solar; or a combination of these clean, renewable, truly alternative energy technologies?
Respectfully,
Paul Chakroff
Paul Chakroff
Director, VI Conservation Society
Dear Editor
The Virgin Islands Daily News
Following is an Open Letter to Alpine Energy Group, second in a series of four letters addressing questions related to the proposed construction of petroleum coke/municipal solid waste burning power plants in the US Virgin Islands.
Why does Alpine continue to perpetrate the fiction that they can meet the permit and construction schedule built into the PPAs? The permit schedule was irrevocably rendered unachievable in June 2009 when USEPA ruled against an attempt by Alpine to avoid federal regulation of their toxic air emissions. Alpine had argued in a February 2009 letter to USEPA that the Alpine boilers are not municipal incinerators, even though they are designed to and intended to incinerate municipal solid waste. The attempted end run around federal regulations designed to protect the environment and public health speaks as much to Alpine’s lack of concern for the welfare of the USVI community as it does their inability to deliver energy according to the time schedule mandated in the PPAs.
Has Alpine applied for even one of the 26 construction permits and approvals, of which all must have been applied for by November 8, 2009, according to the PPAs? Alpine has been incurring penalties or delay liquidated damages since November 9, 2009. The penalties, approximately $1 million to date, continue to build at a rate of $10,000 per day.
Why has Alpine failed to submit a Prevention of Significant Deterioration (PSD) permit application to USEPA for the St. Croix plant within the mandated 90 days of signing the PPA? Maybe because the air pollutants already discharged into the atmosphere between HOVENSA and Frederiksted already come close to the maximum limits allowed by USEPA for at least two air pollutants. Is Alpine waiting for HOVENSA to reduce its air pollutant emissions to make room for Alpine emissions? How long will that take?
Why hasn’t Alpine submitted air quality modeling data to USEPA for the St. Thomas plant? Maybe because they do not want the public to know that their pollution plumes will blow over St. Thomas neighborhoods, schools, the Roy Lester Schneider Hospital and the Charlotte Kimelman Cancer Institute most days of the year. Alpine proposes yearly emissions of 183 tons of particulate matter, 245 tons of nitrogen oxides, 224 tons of sulfur dioxide, 257 tons of carbon monoxide, 107 tons of volatile organic compounds, 1000 lbs of lead and 20 tons of other hazardous air pollutants into the atmosphere per year from the St. Thomas plant. Alpine has not disclosed the tons of air pollutants for the St. Croix plant, nor have they disclosed the tons of carbon dioxide from either plant.
If Alpine’s plants use best available control technology (BACT) for air pollution emissions, why are projected particulate matter emissions higher than emissions from 75% of coal-fired power plants operating in the US? Fossil fuel-fired power plant particulate emissions include cancer-causing polycyclic aromatic hydrocarbons. Has anyone asked what the doctors (or the patients) at the Charlotte Kimelman Cancer Institute think of being downwind from Alpine’s St. Thomas plant?
How does burning petroleum coke affect public health? Health threats from solid fossil fuel combustion, including cancer, asthma and other respiratory diseases, are well documented. Petroleum coke contains the heavy metal nickel in high concentrations and carbon in the form of polycyclic aromatic hydrocarbons (PAHs). Both nickel compounds and PAHs are known to cause cancer. People can be exposed to nickel compounds, PAHs and other toxins from smoke stack emissions and from exposure to petroleum coke dust and fly ash carried in the wind from handling and storage of these materials. Environmental, public health and other social costs have not been accounted for by WAPA in comparing costs of fossil fuel combustion energy generation technologies with pollutant-free non-combustion energy generation technologies.
Why is it that boilers designed to deliver 49 MW will only deliver 36.4 MW in non-major overhaul years and only 32.7 MW in major overhaul years under the Alpine PPAs? Is it at least in part because bubbling fluidized bed boilers experience more down time for scheduled and unscheduled maintenance and repair than circulating fluidized bed boilers like the one we saw in Jacksonville? Doug Finke, St. Johns River Power Park Plant Manager, stressed how complicated the JEA system is and how it impressed him every day that they do not have major breakdowns. According to Mr. Finke, “getting the heat balance just right is a real art.”
How much fresh water will be required for operations of the Alpine plants? What will be the quality of water to be discharged from the plants? According to an October 2009 New York Times Article:
“Even as a growing number of coal-burning power plants around the nation have moved to reduce their air emissions, many of them are creating another problem: water pollution. Power plants are the nation’s biggest producer of toxic waste, surpassing industries like plastic and paint manufacturing and chemical plants…. Much power plant waste once went into the sky, but because of toughened air pollution laws, it now often goes into lakes and rivers, or into landfills that have leaked into nearby groundwater, say regulators and environmentalists.”
Why does Donald Hurd, Alpine’s Executive Vice President, claim that the fly ash created from combustion of petroleum coke is a by-product that sets up like a rock with the mere addition of water, and can be used as fill under road surfaces? Hugo Hodge, Senators Barshinger, O’Reilly, Sanes, Thurland and I were told otherwise in Jacksonville. The fly ash does set up like a rock with the addition of water as described by Mr. Hurd. However, the so-called “rock” is very unstable and breaks down under natural conditions, therefore is not suitable for the application suggested. JEA is accumulating a mountain of petroleum coke combustion fly ash with nowhere to dispose of it.
Fly ash is not only a solid waste problem of huge proportions, but it is also under consideration for classification by USEPA as a hazardous waste. If fly ash is determined to be a hazardous waste, handling, transport and disposal of this waste product would become much more difficult and expensive. Note too that fly ash to be produced by the Alpine plants contains ash from combustion of petroleum coke and municipal solid waste (MSW). Even if fly ash from petroleum coke combustion is determined not to be a hazardous material, the MSW contributed ash could be.
What is the predicted chemical composition of the fly ash to be generated by the co-firing of petroleum coke and refuse-derived fuel? Or do we not know, since these two fuels have never before been incinerated together in a fluidized bed boiler? There is no known commercial power plant operating anywhere that is co-firing petroleum coke and PRDF, as Alpine plans to do in the USVI.
Why does Donald Hurd claim that fly ash is a misnomer, implying that the extremely fine particles do not fly? I observed fugitive dust drifting across the JEA property boundary fence. Was it fly ash? It was the same grey color. Regardless, I demonstrated at the January 22, 2010 Senate Committee on Economic Development, Energy and Technology (CEDET) hearing how light and airborne petroleum coke combustion fly ash really is. How will fly ash (and petroleum coke dust) behave in tropical storm level winds? How will it impact neighboring communities? How will it impact the quality of cistern water collected from residential roofs downwind from the fly ash piles?
Respectfully,
Paul Chakroff
Paul Chakroff
Director, VI Conservation Society
Dear Editor
The Virgin Islands Daily News
Following is an Open Letter to the VI Waste Management Authority, third in a series of four letters addressing questions related to the proposed construction of petroleum coke/municipal solid waste burning power plants in the US Virgin Islands.
What do we know about the predicted air emissions from combustion of plastics, pesticides, Clorox and other household chemicals, batteries, metals and other toxic materials in municipal solid waste (MSW)? Heavy metals and dioxins are documented problems in waste-to-energy plant emissions. A dioxin compound well known to the Vietnam Veterans in our community is a defoliant with the common name Agent Orange. Dioxins are highly dangerous, with toxicity measured in parts per trillion, and which may cause cancer, thyroid and neurological damage, and disrupt reproductive and respiratory systems. It is suggested that there may be a tradeoff between combustion temperatures for maximum destruction of dioxins (>2000° F) and optimal temperatures for removal of sulfur from the burning high-sulfur petroleum coke (1500° – 1700° F).
Why does VIWMA Executive Director, May Cornwall keep saying that VIWMA will pay Alpine $18 million per year to process pelletized refuse-derived fuel (PRDF) from MSW? According to the VIWMA/Alpine Service Agreements, the amount to be paid to Alpine escalates from over $19 million in the first year of operation to over $27 million in the 20th year and over $30 million in the 25th year of a renewed Service Agreement.
How much of VIWMA’s current budget will be displaced by payments to Alpine for processing PRDF? VIWMA will continue to incur costs for collection, transport, sorting and disposal both before and after the PRDF process. According to the Service Agreements, $19 million to $30 million will be paid per year to Alpine for processing PRDF from MSW. We do not know how much these payments will offset the ~$18 million currently spent by VIWMA for MSW handling and disposal.
Does the Alpine deal solve our solid waste problem? While 40% (73,000 tons) of our MSW may be processed into PRDF, the Alpine facilities do not provide a solution for the other 107,000 tons of MSW generated in the USVI per year. Up to an additional 100 tons per day (36,500 tons per year) of metals, glass, grit and other noncombustible solid waste will be returned to VIWMA after PRDS processing. An additional 370,000 tons per year of new hazardous solid waste in the form of fly ash will be generated from the combustion of petroleum coke and PRDF. Adding the noncombustible MSW plus the fly ash we end up with over 500,000 tons per year of solid waste, most of which may eventually be classified as hazardous waste by USEPA. How does a 500,000 ton per year solid waste “solution” solve our 180,000 ton per year MSW problem?
Why is the solution to our solid waste problem being held hostage to the petroleum coke combustion side of Alpine Energy PPAs? Alpine’s original bid included generation of 13.5 MW of energy from trash, but it did not include petroleum coke as a co-fuel. We need to separate the MSW discussion from the energy generation issue and allow VIWMA to move forward quickly on solving our MSW problem. Solid waste management and energy generation do not have to be handled together, and there appear to be strong regulatory compliance, economic, environmental and public health advantages to dealing with them separately.
Respectfully,
Paul Chakroff
Paul Chakroff
Director, VI Conservation Society
Dear Editor
The Virgin Islands Daily News
Following is an Open Letter to Governor John P. deJongh, Jr., last in a series of letters addressing questions related to the proposed construction of petroleum coke/municipal solid waste burning power plants in the US Virgin Islands.
In his State of the Territory Address, Gov. John deJongh reported that HOVENSA is planning a reduction of air pollutant emissions by 50%. How quickly will HOVENSA reduce its emissions? The importance of timing to the Alpine discussion is that such a reduction in air emissions appears to be the only way Alpine could hope to get a PSD permit to release their toxic air pollutants into the St. Croix atmosphere; and would dictate the date when Alpine could get a PSD permit for the St. Croix facility. Has anyone asked the people or businesses of Frederiksted what they think of trading some of HOVENSA’s air pollution for Alpine’s air pollution?
Why do energy, environmental and climate change policies of the deJongh Administration appear to be opposite those of the US Government under the Obama Administration? At the very time in history when President Obama and world leaders are seeking solutions to global threats from climate change, it is unconscionable that the deJongh Administration is promoting solid fossil fuel combustion for new energy generation when cheaper, cleaner, healthier, quicker-to-come-online, reliable, proven technologies are available for generation of baseload electric energy from our abundant renewable energy resources.
What is the lost opportunity cost of failing to take a leadership role in development of 21st Century renewable energy, but rather choosing to take a back seat to other nations and the Obama Administration by promoting energy generation from solid fossil fuel combustion? Federal grants, rebates and other incentives will be available for renewable and green energy technologies, while we can be certain that we will face only costs, penalties and obstacles for development of fossil fuel combustion technologies.
What are the impacts of petroleum coke combustion on property values? In a recent radio interview, a realtor stated that property values downwind from Alpine’s St. Thomas plant would suffer. Talk show host, Steve Nisky, concluded that it is good news: lower property values would make properties more affordable to the local population. Wrong answer, Steve. The exchange illustrates that there are serious environmental justice as well as economic issues related to the Alpine projects that we have not yet begun to address.
What are the impacts on USVI tourism industry? Burning solid fossil fuels does not promote our ecotourism branding or our sun/sea/sand America’s Paradise image. Renewable energy does, and opens branding and marketing opportunities that will be lost to us if we pursue the Alpine deal.
What are the costs to a tropical island territory of climate change? Increased hurricane and tropical storm frequency and intensity; coral reef losses from increases in sea water temperature and acidity – impacts on tourism, marine fisheries and protection of coastal development. Here again we have barely begun to assess the external costs of this deal, which would release greater quantities of greenhouse gasses into the atmosphere than fuel oil combustion. I will be interested in how WAPA and Alpine quantify these very real environmental and social costs.
Respectfully,
Paul Chakroff
Paul Chakroff
Director, VI Conservation Society
