The Fable Of The Pirkey Power Plant (As Told By Texas State Senator Bryan Hughes)

Summary of the Fable

Evil fossil gas devouring Monster Asset Managers (MAMs) compelled Princess AEP to prematurely kill her beloved youngster Pirkey. Jobs and warmth for houses had been misplaced. Youngsters starved within the chilly 🥶. Offended gods showered Storm Uri upon the Kingdom of Texas. Aided by the crafty and malicious Renewable Vitality Orcs, the complete Kingdom was solid into ice. All of Center Earth was almost misplaced. With the assistance of Chairman Gandalf, a small committee of courageous and delightful Elves 🧝🏽‍♀️🧝🏻 referred to as the MAMs to the Shire of Marshall to solid a spell upon them to ensure this might by no means occur once more.

A lot has been written concerning the December 15, 2022, Texas Senate Committee on State Affairs listening to by which the committee grilled Dalia Blass (Senior Managing Director and Head of Exterior Affairs at BlackRock, Lori Heinel (World Chief Funding Officer of State Road), and Lorraine Kelly (World Head of Funding Stewardship Options at ISS). The day earlier than, Committee Chairman Bryan Hughes (R-Mineola) (he of a neatly trimmed, barely graying beard and a fashionably lengthy however tasteful hairstyle) graciously dismissed John Galloway, Vanguard’s World Head of Funding Stewardship. Mr. Galloway was saved the lengthy journey ✈️ from Malvern (inhabitants of three,419) to the comparatively bustling metropolis of Marshall (with a inhabitants of round 23,000) since Vanguard had expeditiously withdrawn from the Internet-Zero Asset Managers Alliance every week earlier than.

Sadly, I’d already quite booked myself for December 15 and didn’t have the chance to pay attention to the hearings, kindly broadcasted stay for all to see—without spending a dime! I then obtained busy (you know the way this stuff go as the vacations strategy) and it was solely yesterday that I had the chance to observe over six hours of riveting political theater in Half I (2’ 43”) and Half II (3’ 50’). Not fairly so long as Elements I (”An Surprising Journey”) and II (”The Battle of the 5 Armies”) of “The Hobbit” which gave me hope for a Texas Half III (”The Desolation of Smaug”)! So I popped myself some popcorn 🍿, grabbed a number of chilly beers 🍺, and sat down for the present.

In his comfortable and lilting Texas drawl Chairman Hughes graciously and warmly welcomed all of the visitors to Marshall, a “lovely piece of historical past (the primary metropolis in Texas to have telegraph service with a line that linked to New Orleans) and nonetheless making historical past (possibly via these hearings?).” He additionally thanked the oldsters from Marshall for letting them be there for “an excellent time as we speak (unsure their out-of-town visitors felt that means, however they will communicate for themselves), a worthwhile time (I suppose that relies on the that means of “worthwhile”), an essential time (solely time will inform).” He additionally proudly famous that in Texas hearings “actual folks get to come back and testify.” Contemplating myself an actual particular person, that caught my consideration. It generated some hope for a cameo look within the standard new TV 📺 sequence “Crimson States Boycott the Boycotters”!

Since I’m not knowledgeable film critic, I don’t have the abilities to jot down a pithy abstract which can encourage (or not) a possible viewer, with sufficient engaging tidbits but not making a gift of the dramatic ending, to see the present. Given these limitations, I’ll merely give attention to a brief section of 4 minutes and 37 seconds, beginning at 47’ 48” and ending at 51’ 25”in Half I.

I do know quite a bit about ESG, however I do know nearly nothing about lignite coal mines, utility energy crops, the power grid, and the power scenario in Texas. I noticed this as a studying alternative! Whilst I enter my eighth decade, I’m at all times eagerly searching for new data. Chairman Hughes’s feedback definitely gave me a possibility to take action. Let me share with you what I believe I realized, however as an power neophyte I may nicely have gotten some issues incorrect.

Teaser alert. Like a lot of the rhetoric of the anti-ESG crowd, there may be this patriotic fervor about free markets whereas unabashedly ignoring their actuality and even attempting to intrude with them. On this case it’s coal vs. renewables. I’m glad I nonetheless wasn’t consuming popcorn after I did some observe on analysis on the 4 minutes and 37 seconds I watched, or I may need choked on it. Extra on this beneath.

The Chairman identified that the power dialogue was not merely about oil and fuel vs. renewable power but in addition about coal, a “clear burning power and dependable power and good jobs.” I believe I perceive the idea of dependable power, however I’m puzzled concerning the clear power declare. In keeping with the U.S. Vitality Info Administration, coal has the most important carbon footprint at 211.87 kilos of CO₂ per million BTUs. By comparability, diesel and residential heating gas is 163. 45 and pure fuel is 116.65.

By way of jobs, again in April 2018 the Texas Comptroller’s officer, below Glenn “Chuck” Hegar, posted an article “Photo voltaic Energy in Texas: The Subsequent Large Renewable?” (Yep, the identical Chuck Hegar who ran for re-election using the anti-ESG wave browsing the ludicrous Texas Part 809 Boycott Provision which I’ve already dissected.) The article enthusiastically begins “Ten years in the past, Texas’ photo voltaic trade was pretty small, however as we speak some imagine it’s able to tackle a a lot bigger share of the state’s power wants.” It proudly famous that Texas ranked seventh within the nation by way of cumulative photo voltaic capability and fourth by way of photo voltaic jobs (8,872 vs. 1,037 in coal). (Redder and redder Florida can be within the high 10 on each counts.) The article additionally identified the irony that “the oil and fuel increase prompted by hydraulic fracturing and different enhanced restoration strategies has influenced electrical energy markets in renewables’ favor, driving down gas prices and making each coal and nuclear power much less aggressive on value. In impact, it’s lowered the worth factors at which energy producers should compete.”

I’ve nothing however respect for coal miners. Coal mining is difficult and harmful work that results in elevated danger of coronary heart and lung illnesses and limits life spans. I additional recognize the necessity for individuals who work in coal mining communities to feed their households and educate their youngsters. What I ponder is whether or not there might be different and higher jobs for these folks as coal mining jobs disappear—as they’ve been for many years—pushed by financial, technological, and regulatory forces.

So it’s honest to ask what has occurred in Marshall. Like at all times, it’s good to get the info from native sources on the bottom. In keeping with The Marshall Information Messenger, “Sabine Mine President Andy Hawbaker stated all however 26 of the mine’s round 130 staff have already discovered work exterior the mine.” It additional famous the work of the “Simply Transition Fund, a nonpartisan grantmaking group serving to coal communities navigate financial transitions away from fossil fuels.” It additionally identified that “ Pirkey will depart behind substation and technology infrastructure at Pirkey Lake that [AEP External Affairs Manager Mark] Robinson stated AEP may probably make the most of for photo voltaic power manufacturing.”

Senator Hughes gravely famous that the 36 year-old Pirkey Energy Plant had “a long time and a long time of life left” to supply nice jobs. (Traditionally energy crops have a mean lifespan of 46 years.) He additionally darkly asserted that AEP “desires to close that plant down, prematurely” saying in a warning tone that he has “proof that AEP has been focused by the very corporations we’re going to speak to as we speak.” Oh, what drama! The life and dying of an influence plant! And maybe a untimely dying on the sword of some massive asset managers! What may make for a extra gripping story on a gradual information day in bustling Marshall?

I checked out AEP’s high shareholders. Shurnuff, the Large Three all of those pink states are railing about are the three largest shareholders within the firm: Vanguard (8.80 p.c, however possibly now a good friend?), BlackRock (5.86 p.c ), and State Road (5. 39 p.c) have a whopping collective 20.5 p.c. Greater than sufficient to push this firm round and make them shut that plant with the coal mine as collateral harm. I figured that if this had been true, AEP would have loudly complained about this gross injustice.

As a substitute, what I discovered was that this transfer is a part of a broader international technique of AEP to shutter about half of its coal-fired energy fleet. “Economics are a significant factor in AEP’s spate of not too long ago introduced closures. The corporate, like different U.S. coal mills, is grappling with refining price estimates of complying with environmental guidelines in opposition to plenty of components.” In 2020 the corporate estimated that that future investments to satisfy present and proposed necessities may vary from about “$500 million to $1 billion via 2026.” At this level, I’m nonetheless okay with my popcorn.

After all, the Supreme Court docket’s ruling in opposition to the EPA in “WEST VIRGINIA ET AL. v. ENVIRONMENTAL PROTECTION AGENCY ET AL.” may cut back these prices however future laws may conceivably make them greater. It’s powerful for firms having to make long-term funding selections concerning power sources in a altering political, geopolitical, financial, technological setting.

The story is greater than Marshall. It’s about the entire state of Texas. Aesop Hughes ruefully recalled and reminded the viewers a number of instances of Winter Storm Uri which slammed Texas final yr. “My goodness,” he solemnly intoned with a slight shake of his head, “I believe we realized in Texas a yr in the past we want extra dispatchable power, not much less.” (I didn’t know what dispatchable power was so appeared it up. Principally power you may activate and off at will.) One other Senator sagely commented that “wind and photo voltaic solely operates when it chooses to.” (So there are not any batteries in Texas?) The argument right here is that via some mystical power a plant that was nonetheless working someway contributed to a close to break down within the Texas power grid.

Not realizing something about electrical grids, I checked this out after the present. I’m glad I wasn’t consuming popcorn since now I might have certainly choked 🤮. In keeping with Sustainable FERC Challenge, the explanation this storm left 4.5 million folks with out energy for days, killed 248 folks, and price the financial system $195 billion in damages—making it the most important catastrophe in state historical past—”is that counting on fuel [NB: not coal] poses severe dangers, and {that a} robust, nimble grid is completely important.” The scenario was exacerbated by the truth that the Lone Star state likes to go it alone on the subject of electrical energy “as a result of a lot of the state is {an electrical} island with very restricted connections to neighboring states.”

Earlier than focusing his glare on Ms. Blass and Ms. Heinel, at 51’ 25” Chairman Aesop gave Senator Lois Kolkhorst a possibility to contribute to the fable. She referred to somebody as her “favourite professor” as a result of he talked about “politicization” (which she stumbled over saying it a few instances on account of, she stated, the dearth of espresso and an early begin). I’ll skip the apparent irony of who’s doing the politicization. Extra importantly, she didn’t point out the professor’s identify however because it’s not me it doesn’t matter. And I’m jealous.

Senator Kolkhorst talked about how China burns 25,000 tons of coal and we burn 2,500 per yr. She complained about an “unlevel taking part in subject” as a result of China (and Saudi Arabia, Russia, and India) don’t care about their ESG scores (ummm, Senator, firms get ESG scores, not nations) and easily care about offering low-cost power for his or her economies. “ESG is working to tear American down,” the Senator cried! (Each time I flip across the energy of ESG to wreak destruction on al elements of life in America appears to develop in Crimson State Minds.) She didn’t point out that China may exceed its renewable power goal of 33 p.c by 2025 (it was 12.4 p.c within the U.S. in 2021) or that China is successful the race for clear power know-how.

In conclusion, the Senator rued the truth that “We lead the nation in renewables to the detriment of our residents as we noticed in Uri.” This caught my ear since I’d already realized from Mr. Hegar’s workplace that Texas was making nice strides in renewable power. I questioned if he’d seen the error of his methods after struggling via Uri. It’s in researching this that I used to be glad I’d run out of popcorn. In any other case, I may need choked and died and never be right here to inform this fabulous story. I additionally wished I’d grabbed a few whiskies 🥃 with beer chasers to extra totally recognize the sheer inanity of the listening to.

Two months earlier than the December 15 Marshall Monster Mash, which generated extra warmth than mild on the power scenario in Texas, the Comptroller’s Workplace revealed “Texas’ Vitality Profile A Assessment of the State’s Present Conventional and Renewable Vitality Capabilities.” (Yep, Chuck gained the re-election so it’s him once more!) It offers an insightful evaluation of the evolving position of renewable power sources in Texas that may be captured in three factors:

1. Texas leads the nation in power manufacturing and consumption, being the most important producer of oil (43 p.c), pure fuel (25 p.c), and wind-powered electrical energy (26 p.c).

2. Regardless of these capabilities, limitations within the present Texas infrastructure (e.g., transmission traces and battery storage) make it “unable to transmit and retailer all of the electrical energy generated by renewable power sources, together with wind and photo voltaic.”

3. Thus, Texas wants a various power portfolio, together with oil and fuel sources, to make sure sustainable and price efficient power manufacturing. (Film viewer’s question: Was coal not talked about on function or was this simply an editorial oversight?)

And ya gotta love the closing quote from Mr. Hegar: “We should work collectively to advance well timed, sensible options that develop renewable power, whereas acknowledging the continued significance of a diversified power portfolio. Our financial well being and well-being rely upon it.” In all sincerity this makes good sense to me. I don’t count on oil and fuel to fully disappear ever, though we have to wean ourselves away from it as shortly as we will inside coverage, financial, technological, and geopolitical constraints.

Right here’s the place I’m confused. Bear in mind, I’m an ESG man, not an power man 😍. Did I hear it proper that Senator Kolkhorst is throwing shade at her fellow Texan Mr. Hegar? So if he’s the true downside, why drag Ms. Blass, Ms. Heinel, and Ms. Kelly for a pre-holiday journey to the stunning little city of Marshall for a mindless dialog? Why not haul in Mr. Hegar (in shackles, if mandatory) and sternly demand that he clarify himself? And inform him that if he isn’t an excellent boy and alter his methods he’s solely going to get coal in his stocking for Christmas! Truly, that might an indication of affection from her, so I take that again. As a substitute, he’ll get a photo voltaic panel.

Summary of the Actuality

The power transition is an advanced one that can take time and can contain a mixture of gas sources for many years to come back. Renewables have an essential position to play however they don’t seem to be a silver bullet. Infrastructure by way of transmission traces and grid-scale battery storage must be developed. Asset managers have to rigorously allocate their capital throughout firms producing completely different sources of power. Public coverage has an essential position to play. In some ways Texas is displaying constructive management. In different methods Texas is placing America’s power safety and skill to realize aggressive benefit in clear know-how in danger. By holding hearings which are fully divorced from actuality, Texas politicians are making it tougher for America to do what must be performed.

In the long run, actuality trumps (cute, proper?) fables.