Update: Fisker Karma Electric Car Gets Worse Mileage Than an SUV

The Fisker Karma electric car, developed mainly with your tax money so that a bunch of rich VC’s wouldn’t have to risk any real money, has rolled out with an nominal EPA MPGe of 52 in all electric mode (we will ignore the gasoline engine for this analysis).
Not bad? Unfortunately, it’s a sham. This figure is calculated using the grossly flawed EPA process that substantially underestimates the amount of fossil fuels required to power the electric car, as I showed in great depth in an earlier Forbes.com article. In short, the EPA methodology leaves out, among other things, the conversion efficiency in generating the electricity from fossil fuels in the first place [by assuming perfect conversion of the potential energy in the fuel to electricity, the EPA is actually breaking the 2nd law of thermodynamics].
In the Clinton administration, the Department of Energy (DOE) created a far superior well to wheels MPGe metric that honestly compares the typical fossil fuel use of an electric vs. gasoline car, using real-world power plant efficiencies and fuel mixes to figure out how much fuel is used to produce the electricity that goes into the electric car.
As I calculated in my earlier Forbes article, one needs to multiply the EPA MPGe by .365 to get a number that truly compares fossil fuel use of an electric car with a traditional gasoline engine car on an apples to apples basis. In the case of the Fisker Karma, we get a true MPGe of 19. This makes it worse than even the city rating of a Ford Explorer SUV.
Congrats to the Fisker Karma, which now joins corn ethanol in the ranks of heavily subsidized supposedly green technologies that are actually worse for the environment than current solutions.
Postscript: I will say, though, that the Fisker Karma does serve a social purpose — Hollywood celebrities and the ultra rich, who want to display their green credentials, no longer have to be stuck with a little econobox. They can now enjoy a little leg room and luxury.
Updates: Just to clarify, given some email I have gotten. Most other publications have focused on the 20 mpg the EPA gives the Karma on its backup gasoline engine (example), but my focus is on just how bad the car is even in all electric mode. The calculation in the above article only applies to the car running on electric, and the reduction in MPGe I discuss is from applying the more comprehensive DOE methodology for getting an MPG equivalent, not from some sort of averaging with gasoline mode. Again, see this article if you don’t understand the issue with the EPA methodology.
Press responses from Fisker Automotive highlight the problem here: electric vehicle makers want to pretend that the electricity to charge the car comes from magic sparkle ponies sprinkling pixie dust rather than burning fossil fuels. Take this quote, for example:
a Karma driver with a 40-mile commute who starts each day with a full battery charge will only need to visit the gas station about every 1,000 miles and would use just 9 gallons of gasoline per month.
This is true as far as it goes, but glosses over the fact that someone is still pouring fossil fuels into a tank somewhere to make that electricity. This seems more a car to hide the fact that fossil fuels are being burned than one designed to actually reduce fossil fuel use. Given the marketing pitch here that relies on the unseen vs. the seen, maybe we should rename it the Fisker Bastiat.
Update #2: I suppose it is too late for this plea, commenters who wish to hypothesize on methodological flaws are highly encouraged to read the original linked post explaining the math. For example, a number of folks have suggested I missed the fact that refining takes substantial energy as well. In fact, the DOE methodology used doesn’t just penalize electric cars for combustion inefficiencies in the power plant, it also penalizes gasoline cars for the energy in gasoline refining and transportation.
Update #3: Here is a special bonus, Ray Lane, Chairman of Fisker Automotive, did an interview in 2009 praising the Obama Administration as the first time he has seen government successfully making private investments. His one example: Solyndra!

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New model for Bay cleanup muddies goals, cities say

For two decades now, the Chesapeake Bay cleanup has been guided largely by a computer model. Housed in Maryland, it spits out targets and forecasts and helps officials set goals for what should be done to restore North America's largest estuary.

The states involved in the celebrated cleanup, including Virginia, have a say in how the model works and help set its guidelines, but its operation falls mainly to the U.S. Environmental Protection Agency.

How the modeling is done, and what data are fed into the computer, have been bones of contention for years. Today, they are central to pending lawsuits from farmers and developers who argue that an aggressive push from the Obama administration is based partially on flawed, incomplete science and should be stopped.

Now another wrinkle has surfaced.

Virginia and several other states - including Maryland, Pennsylvania and Delaware - are complaining that a newly tweaked version of the model, known as 5.3.2, is leading to some weird and incomprehensible results for what local governments are expected to accomplish in the coming years to dramatically improve water quality by 2025.

In James City County, for example, data stemming from the previous model urged the county near Williamsburg to reduce nitrogen from farms, streets, storm drains and development sites by 8 percent, phosphorus by 11 percent and sediment by 20 percent. The guidance worried local officials, unsure how they would pay for environmental improvements and controls to hit those targets.

However, computer runs performed by the state using the new model prescribe something completely different: no reductions needed for nitrogen, and a 20 percent surplus of phosphorus and a 350 percent cushion for sediment.

In short, on paper the county went from a polluter to one that doesn't have to do anything.

While the James City County discrepancies are extreme - new data show that most Virginia localities have to do more, not less, to help save the Bay - state and local officials face a quandary: How exactly to proceed in the face of changing targets?

"What do we say to our localities? 'Well, we think that these practices we are asking you to implement might help you reach your goal, but we really don't know what that goal is and we aren't sure the money you spend to implement these practices will make any difference?' " said Doug Domenech, Virginia's secretary of natural resources, Gov. Bob McDonnell's top environmental official.

The EPA, environmentalists and some scientists concede that the modeling is imperfect and will continue to be updated and improved. But they also say the states are not required to be so precise in their calculations, and that no one asked them to break down data county by county, pound by pound of pollutants, for what they need to do to help the effort.

The model, they add, is not designed to be so specific and its main strength is defining what states must do river by river.

"They're getting down into the weeds, and we're telling them they don't need to go there," said Jeff Corbin, the EPA's senior adviser on the Chesapeake Bay. "Use common sense. Let's get on with it."

Carl Hershner, a scientist at the Virginia Institute of Marine Science, said model critics are missing the point of the new push to get serious about restoring the Bay.

"None of this stuff should impede the planning for what everyone knows is needed to be done," Hershner said. "We need to better control nutrients entering the Bay, and every state, county and city has to help do that."

The two main nutrients, nitrogen and phosphorus, are good for the Bay in proper amounts. But in excess, as today, they spark algae blooms that rob oxygen from water, making life difficult for aquatic life. Sediment that washes off the land clouds water quality, shallows creeks and rivers, and smothers key underwater grasses.

In settling a lawsuit years ago, the EPA pledged to clean up the Bay enough to remove it from a national list of dirty waters. In December, the EPA and its partner states agreed to a pollution diet, or TMDL, short for Total Maximum Daily Load, to achieve this goal.

The diet, which the computer model helped to define, called on Bay states to reduce nutrients and sediments through various means and to implement those improvements by 2025, with 60 percent of them complete by 2017. Virginia estimates its part of the deal could cost as much as $8 billion.

Amid economic woes and lean budgets, officials in the McDonnell administration say they have to be precise in how they spend such money, and that the computer model or any other tool should help guide where to get the biggest bang for the buck.

If the model is not precise enough to tell localities what they need to do without fear of penalty from the EPA, it should be refined to do so before moving forward, state environmental officials say.

"Dealing with numbers like this is just ridiculous when you're trying to put together a plan that the EPA will hold you accountable for," said Anthony Moore, an assistant secretary of natural resources overseeing Bay issues.

Moore and other senior officials from concerned states met with EPA leaders at a "modeling summit" last month. Chiefly, the states complained that many computer problems stem from calculating the impact of farm pollution.

One of the primary strategies for curbing fertilizer runoff from agriculture is implementing nutrient management plans on farms. But in many cases, the new model shows that such plans increase nitrogen and phosphorus pollution, not reduce it, Moore said.

In response, the EPA's regional director, Shawn Garvin, sent a letter to Virginia and other states that attended the summit. Garvin wrote that the EPA will correct its model but that the states should continue writing their plans reflecting how local governments will contribute to the effort. The plans are due Dec. 15.

Garvin also stressed that state calculations based on the new model do not have to be so specific.

"EPA does not expect the jurisdictions to express the 'local area targets' in terms... such as pounds of pollutant reductions by county," he wrote.

Instead, Garvin added, the next round of state plans "could identify 'targets' or actions that local and federal partners would take to fulfill their contribution toward meeting the Chesapeake Bay TMDL allocations."

Virginia officials, while disappointed, said they will press on, though they worry local governments may balk at committing to pollution cuts amid shifting targets.

John Carlock, an environmental specialist with the Hampton Roads Planning District Commission, which represents local governments across the region, described the changing models as "extremely frustrating for everyone."

The commission had serious problems with the previous model and threatened to challenge its recommendations in court.

"The states and the EPA are coming to the conclusion that the model works pretty well at the state level, OK at the river basin level, but not so good at the local level," Carlock said. "We absolutely need more consistency."

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North Dakota Attorney General: The EPA “Needs To Be Reined In And They Need To Follow The Law”

BISMARCK, ND – “I’m never very optimistic that the EPA will change its mind based on common sense and the law,” said Attorney General Wayne Stenehjem today during an interview on the Scott Hennen Show. “They have shown that they’re unresponsive to federal law.”

“They need to be reined in and they need to follow the law.”

Stenehjem was one of several state leaders who testified last week at an EPA public meeting concerning regional haze regulation. The EPA has declared the state’s plan for regulating haze to be insufficient and is seeking federal control.

Stenehjem says this action is both unnecessary and illegal.

“The EPA came in and said the state’s plan is not good enough,” said Stenehjem. “They have a much more expensive and much less expensive plan.”

“What they intend to do is usurp the state’s authority,” to regulate haze. “[The Clean Air Act] calls for the states to take the lead role in designing and implementing the clean air controls,” said Stenehjem alleging that the EPA isn’t following that law. He says that the state may need to go to court over the issue.

“If we go to court with the EPA we will be successful.”

Stenehjem says he isn’t sure why the EPA is targeting North Dakota given that the state gets high marks for air quality. “We are one of a handful of state that meet all the standards for regional air quality,” he said. “Last year Mercer County ranks in the top 25 counties with the cleanest air. Mercer County is home to several lignite-fired coal power plants.”

“The area we’re supposed to protect is Theodore Roosevelt National Park,” said Stenehjem referring to an oft-cited concern of environmentalists. “Theodore Roosevelt National Park was ranked as one of the three cleanest counties in the nation.”

And Stenehjem says that the state has partners in the private sector in keeping the state’s air quality high. “This is not an issue of power plants saying ‘we’re not going to do anything’,” said Stenehjem. The power plants are willing to spend money, “but they want to do it in a reasonable and economically feasible way.”

“What the EPA is proposing to do is come in and take over our regional haze program with technology the experts say won’t work and technology that is enormously expensive.”

Stenehjem said that the EPA has him concerned on other fronts as well. Possible ban on fracking is “one of the things that keeps me awake at night.” Asked if his office would take action should the EPA seek regulation on fracking, Stenehjem said “hat is something we’re getting ready to go on.”

“We’ve got eight lawsuits pending against the EPA. If a fracking rule comes up that usurps again the state’s authority to make a determination we will file another lawsuit.”

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Green Jobs Predictions Proving a Pipe Dream

Clean tech isn't turning out to be the economic engine politicians promised

Source: The Bay Citizen (http://s.tt/134c5)

Flanked by a cadre of local political leaders, Mayor Chuck Reed of San Jose used a ribbon-cutting ceremony for a solar power company last week to talk up the promise of the green economy.

Reed called the opening of the new headquarters of SolFocus, which produces large, free-standing solar panels, an “enormously important” development for the city’s economy.

“Clean technology is the next wave of innovation that Silicon Valley needs to capture,” the mayor said, noting that the San Jose City Council had committed to increasing the number of “green jobs” in the city to 25,000 by 2022. San Jose currently has 4,350 such jobs, according to city officials.

But SolFocus assembles its solar panels in China, and the new San Jose headquarters employs just 90 people.

In the Bay Area as in much of the country, the green economy is not proving to be the job-creation engine that many politicians envisioned. President Obama once pledged to create five million green jobs over 10 years. Gov. Jerry Brown promised 500,000 clean-technology jobs statewide by the end of the decade. But the results so far suggest such numbers are a pipe dream.

“I won’t say I’m not frustrated,” said Van Jones, an Oakland activist who served briefly as Obama’s green-jobs czar before resigning under fire from conservative critics.

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A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.

Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.

The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on.

“Companies and public policy officials really overestimated how much consumers care about energy efficiency,” said Sheeraz Haji, chief executive of the Cleantech Group, a market research firm. “People care about their wallet and the comfort of their home, but it’s not a sexy thing.”

Job training programs intended for the clean economy have also failed to generate big numbers. The Economic Development Department in California reports that $59 million in state, federal and private money dedicated to green jobs training and apprenticeship has led to only 719 job placements — the equivalent of an $82,000 subsidy for each one.

“The demand’s just not there to take this to scale,” said Fred Lucero, project manager at Richmond BUILD, which teaches students the basics of carpentry and electrical work in addition to specifically “green” trades like solar installation.

Richmond BUILD has found jobs for 159 of the 221 students who have entered its clean-energy program — but only 35 graduates are employed with solar and energy efficiency companies, with the balance doing more traditional building trades work. Lucero said he considered each placement a success because his primary mission was to steer residents of the city’s most violent neighborhoods away from a life of crime.

At Asian Neighborhood Design, a 38-year old nonprofit in the South of Market neighborhood of San Francisco, training programs for green construction jobs have remained small because the number of available jobs is small. The group accepted just 16 of 200 applicants for the most recent 14-week cycle, making it harder to get into than the University of California. The group’s training director, Jamie

Brewster, said he was able to find jobs for 10 trainees within two weeks of their completing the program.

Brewster said huge job losses in construction had made it nearly impossible to place large numbers of young people in the trades. Because green construction is a large component of the green economy, the moribund housing market and associated weakness in all types of building are clearly important factors in explaining the weak creation of green jobs.

Advocates and entrepreneurs also blame Washington for the slow growth. Jones cited the failure of so-called cap and trade legislation, which would have cut carbon pollution and increased the cost of using fossil fuel, making alternative energy more competitive. Congressional Republicans have staunchly opposed cap-and-trade.

Haji of the Cleantech Group agrees. “Having a market mechanism that helps drive these new technologies would have made a significant difference,” he said. “Without that, the industry muddles along.”

Still, California has forged ahead with environmental legislation, including its own version of cap-and-trade that is part of the landmark anti-global-warming law AB 32 enacted in 2006. Another measure, signed into law earlier this year by Brown, requires utilities to generate at least a third of all their electricity from renewable sources by 2020.

State government officials said they were still banking on these new laws to propel demand for 20,000 megawatts of renewable energy, the cornerstone of Brown’s green jobs plan. In June, the governor attended the groundbreaking of the 3,470-megawatt Blythe Solar Power Project in the Mojave Desert, which backers say will create 5,390 construction jobs and 400 permanent positions.

The 600-turbine Alta Wind Energy Center southeast of Bakersfield is set to become the world’s largest wind farm when it is completed in 2015. Terra-Gen, a company based in New York that has received more than $300 million in private investment from Google and Citi for the Alta farm, says it will bring 1,020 megawatts on line by the end of the year. But even when it is fully up and running, the wind farm will bring only 50 permanent operations and maintenance jobs to rural Kern County, the company said.

Both the possibilities and limitations of the green economy were on display at SolFocus’ ribbon-cutting in San Jose.

A SolFocus spokeswoman, Nancy Hartsoch, said the company was willing to pay a premium for the highly-skilled physicists, chemists and mechanical engineers who will work at the campus on Zanker Road, although the solar panels themselves will continue being made in China. Mayor Reed said he continued to hope that San Jose would attract manufacturing and assembly jobs, but Hartsoch said that was unlikely because “taxes and labor rates” were too high to merit investment in a factory in Northern California.

SolFocus’ plans do not much resemble what Jones, the former Obama administration official, had in mind in his 2008 book, “The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems,” when he described the green economy as “Joe Sixpack with a hard hat and a lunch bucket going off to fix America,” and talked of millions of new jobs.

In an interview last week, though, he seemed to have scaled back. “The green economy as we initially conceived it,” Jones said, “was never supposed to save the entire global economy.”

Bloom Fuel Cells Will Wear Out Before We Finish Paying for Them!

The Pain Point for Bloom Energy and Fuel Cell Makers

In the grand scheme of energy technologies, the key component that makes up a fuel cell — which is like a chemical battery that produces electricity — is relatively short-lived. This Achilles heel is one of the main reasons that building, installing and selling fuel cells can be so expensive, and almost none of the fuel cell makers are profitable yet.

Of course, there are different types of fuel cells, but in general, the stacks that make up a fuel cell, and create the reaction that produces electricity, often last only about two to five years. This is common for different types of fuel cells like solid oxide fuel cells (Bloom Energy makes this type) or proton exchange membrane (PEM) fuel cells, like what ClearEdge Power builds.

A fuel cell’s stacks fill a chamber called the hot box, and it’s this chamber that gets swapped out of these fuel cells every few years. The stack contains a catalyst, often platinum, which, when combined with the fuel source (natural gas or hydrogen) and oxygen create electricity.

Break down

Over time, as the fuel and oxygen are constantly being pumped in and run over the catalyst in the stacks, the chemicals start to degrade and the system starts to wear down.

Fuel cells are similar to a battery in their degrading process (see Why lithium-ion batteries die so young), and fuel cell stacks, like a battery, have an anode and cathode portions. Fuel cells also run at high temperatures, which is another reason these systems degrade quickly.

The short life span of the hot box is a key problem for the capital costs of fuel cell makers. The hot box can make up a significant portion of the fuel cell, and I’ve heard as high as 50 to 75 percent of the cost of the system. That cost can be lower, however, and for example, ClearEdge Power’s VP of Marketing Mike Upp told me the stacks in a ClearEdge fuel cell can make up 25 to 30 percent of the cost of the system.

Costs climb

Fuel cell makers are toiling away at trying to extend the life time of the hot box, as well as reduce overall manufacturing costs. Upp said that while the stacks in ClearEdge’s first iteration of its fuel cell last three to five years, the company’s engineers are working on doubling and tripling that lifetime every few years. Stacks can also be recycled, which can reduce the overall capital costs.

Fuel cell makers are spending a lot on R&D trying to find these stack lifetime breakthroughs, but are also looking to reduce costs via reaching economies of scale of manufacturing. The idea is even if the stacks don’t last longer in the future, they can ultimately be cheaper to produce. Bloom Energy has been scaling up manufacturing of its solid oxide fuel cells, and NEA Partner Scott Sandell told me back when Bloom launched that it would be the economies of scale that would push down costs dramatically over the years.

I heard a rumor recently that Bloom Energy had closed yet another round of $150 million in funding, which would bring its funding raised to over $550 million. Earlier this year, VentureWire reported that Bloom had quietly raised about $100 million more in equity, above its confirmed $400 million. No doubt part of these funds are going to both R&D to extend the life of the hot box, as well as the capital costs to actually replace the hot boxes for its first customers.

We’ll see if any of the leading fuel cell makers can effectively reduce their costs enough, and lengthen the lifetime of the hot box. If they are successful with that, then more of these companies could be profitable one day.

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White House feels pressure on oil pipeline

State Department OK doesn’t sway greens

The State Department's support of a controversial oil-pipeline project is putting pressure on the White House to move forward after three years, despite objections from environmentalists.

A series of public hearings concludes Friday on the Keystone XL pipeline, which would run from Canada's oil sands in Alberta down through America's midsection to the Texas Gulf Coast.

So far, the State Department has published reports in favor of the project, which is projected to create 20,000 jobs and reduce the nation's dependence on overseas oil.

Still, it isn't an easy decision for the Obama administration because it doesn't want to disappoint its environmental supporters, who are opposed to the project. The president is expected to make a decision by the end of the year.

"This is a no-brainer," Sen. Lindsey Graham, South Carolina Republican, told a roomful of pipeline supporters this week, "which means in Washington it's 50-50."

Mr. Graham offered three reasons to approve the pipeline. First, it will create jobs, some 13,000 constructions jobs and 7,000 manufacturing jobs. Second, it will increase the nation's energy supply, and make the country less dependent on overseas oil. Third, Canada is more sensitive to the environmental impact than are Middle Eastern oil countries.

For a nation struggling to find jobs, the pipeline is too good of an opportunity to pass up, Mr. Graham said. That's perhaps the most likely reason why the Obama administration would shun environmentalists and approve the pipeline project.

"If they don't, this will be a defining issue in 2012," he said. "That would be a hard sell to the American people to justify saying, 'No.' Secretary [of State Hillary Rodham] Clinton is a Democrat, and she sees the value of this."

Jack Gerard, president and CEO of the American Petroleum Institute, agreed there will be "political consequences" if the pipeline project is not approved soon.

"It will be a big mistake," he said. "This should not have taken much more than a year. There's no excuse for the delay."

Environmentalists plan to protest Friday before the hearing.

Opponents say the cost of the project is too high. It could endanger hundreds of miles of pristine American heartland from Montana to Oklahoma, as well as Nebraska's Ogallala Aquifer, the underground source of drinking water and irrigation water for much of the Midwest.

The Alberta oil, known as "tar sands oil," is the most harmful type of oil for the atmosphere, the Dirty Oil Sands network says on its website. Tar sands oil produces three to five times more greenhouse-gas pollution than traditional oil and is the fastest-growing source of greenhouse-gas pollution in Canada, the group says.

To keep the pipeline running, electrical-pump stations along the 1,700-mile stretch would have to step up production. That could lead to more expensive electricity costs for locals and more greenhouse gases polluting the air.

Environmentalists point out that 12 spills occurred during the first year along the constructed portion of the pipeline, Keystone 1.

"Most spills are small," said Rosemary Crawford, project director at the Center for Energy Matters. "However, this product is proving to be so toxic that even a small amount of it that spills is dangerous to the people in that area."

Nevertheless, Rep. Gene Green, Texas Democrat, would rather buy oil from "our best friend" to the north than from "countries who hate our guts."

"The environmental groups who have made this the end-all, be-all have made a terrible mistake," he told the same group of pipeline supporters this week.

Mr. Graham agreed.

"The environmental argument falls short of making common sense," he said.

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Electric Bills About to Spike

Utilities across the country need more money for grid updates and pollution controls, and are passing the huge bill on to consumers. Laura Colarusso on why electricity bills are rising.

Already weary of high gas prices and 9.1 percent unemployment, many Americans are about to get another kick in the wallet thanks to large increases in their electricity bills.

From Alaska to Georgia and Wyoming to Florida, utilities are seeking permission to pass on hundreds of millions of dollars in new charges to customers to help upgrade aging infrastructure and build new or retrofitted power plants that comply with tougher environmental regulations, a Daily Beast review of regulatory filings has found.

The influx of requests, many still pending before state regulators, has left energy experts convinced that electricity prices will be on the rise for the foreseeable future as the industry struggles to modernize its aging infrastructure.

“They desperately need to upgrade,” says Bill Richardson, the former New Mexico governor and Clinton-era energy secretary who once famously called America a superpower with a Third World power grid. “You’re seeing rate hikes everywhere because this is a widespread, national problem.”

The pending rate hikes are bad news for poor and elderly Americans on tight budgets, as Congress and the White House begin making cuts to programs that help people cope with their utility bills. One program in particular, the Low Income Home Energy Assistance Program, was slashed during the budget negotiations earlier this year, and is slated for even deeper reductions this fall.

During the budget battle, Congress cut $500 million from the program to bring this year’s total to $4.7 billion, down from a high of $5.1 billion in 2010. For next year, the Obama administration requested only $2.6 billion, leaving states with roughly half the assistance they’ve had in the past. The White House rationale relies on the assumption that energy prices will decline, but regulatory filings have indicated the opposite trend is in store.

Utilities want more money for grid updates and pollution controls., Gene P. Puskar / AP Photo

In the latest round of budget negotiations, House Republicans have suggested adding $822 million on top of Obama’s request for next year, but the gap could still result in rationing.

Already this summer, Illinois cut back on its energy-assistance grants, forcing seniors and poor families to forego air conditioning during the sizzling August heat. And governors of cold-weather states such as Michigan’s Rick Synder and Maine’s Paul LePage—both Republicans—are fighting the drop in funding, warning that people could freeze. Northeastern Democrats are equally concerned by the president’s proposed cuts.

“During these tough economic times, it is critical that we both fully fund LIHEAP and ensure that states have timely access to the funding they need,” Rep. Rosa DeLauro, D-CT, says. “These changes could prevent states from being able to respond quickly to severe cold weather and leave the most vulnerable Americans out in the cold.”

The Beast’s review of regulatory filings found at least 16 utilities covering 6.1 million customers are seeking rate hikes of 5 percent or more. Almost half of those want increases of 10 percent or more.

And several more utilities already have received approval for large increases.

For instance, close to three million customers in parts of Virginia, Kentucky, Ohio, and West Virginia that get their electricity from American Electric Power have seen their rates increase between 48 and 88 percent over the last few years. Those rates are expected to rise an additional 10 to 35 percent in the next three years. The reason? AEP officials are quick to blame environmental regulations that they say are going to cost the company $8 billion in compliance and upgrades.

AEP, which operates in 11 states, says it is raising rates because it needs the cash to upgrade its infrastructure. The company plans to retire five coal plants—which amount to 6,000 megawatts of generation— and build at least two natural gas plants by the end of this decade.

“None of this is cheap,” says Mike Morris, AEP’s chief executive officer. Morris predicts that rolling brownouts also could loom on the horizon because the current system can’t keep up with demand, which is expected to grow by 44 percent by 2035.

Electricity rates were static for most of the 1990s and early 2000s. According to the Energy Information Administration, the average residential customer saw his or her bill increase just seven-tenths of a cent per kilowatt between 1998 and 2004. Between 2005 and 2010, the average price spiked about 2.5 cents and then flattened out over last year as natural gas prices dropped, EIA says.

Dozens of factors affect rate increases, but one of the biggest is that much of the transmission system was built at a time when the radio was still the main form of entertainment. The power grid simply can’t keep up with modern demand as more people use more appliances, computers, and gadgets.

In addition, more than half the states have imposed new clean-energy standards that require utilities to feed in renewable sources. Older systems can’t handle variable power sources such as wind and solar, and therefore require significant upgrades. Throw in pollution controls now required by federal regulations, and utilities are facing billions in upgrade costs that they are eager to pass on to customers.

In Wyoming, the roughly 135,000 households and businesses that get their electricity from Rocky Mountain Power will see their bills go up twice this year alone. In April, rates increased an average of 2 percent to cover increased fuel costs. The second increase took effect at the end of September –an average 8 percent rate hike—to fund infrastructure upgrades.

In South Carolina, Duke Energy has requested a 17 percent increase in residential rates to pay for new power plants and environmental compliance measures. Alaska Electric Light and Power got a 24 percent residential rate hike to deal with inflation and to build a new hydro project.

The pending rate hikes are bad news for poor and elderly Americans on tight budgets.

Customers in Richardson’s home state of New Mexico were looking at a 21 percent hike for infrastructure upgrades, but the state utility commission capped it at 9 percent.

And in Florida, Gulf Power has requested a 10 percent increase—the company’s first request in a decade—to pay for new power lines and other infrastructure. The public service commission won’t rule on the case until early next year, but approved an interim 4 percent price hike for the company’s 376,000 customers.

The industry is at the beginning of what analysts at the Edison Electric Institute, the association of shareholder-owned electric companies, describe as a long-term transition to a lower-carbon industry. Coal is on the way out for many power plants, and natural gas, solar, and wind power are being phased in.

“It’s a relatively recent phenomenon that’s happening because a good portion of the coal plants in use today are at or near the end of their useful lives,” EEI’s Jim Owens explains. Though the specific upgrades will vary among utilities, there is no doubt the costs will be passed on to consumers who will have to shoulder most of the burden despite the economic difficulties they face.

Utilities also are facing more stringent environmental regulations. The Environmental Protection Agency is considering a variety of new rules that would affect electricity generation, essentially forcing utility companies to shutter their coal plants or invest hundreds of millions in scrubbers that remove toxins from the air. Many of these proposed changes are court-ordered and required under the Clean Air Act.

In July, the agency finalized its Cross-State Air Pollution Rule in an effort to cut sulfur-dioxide and nitrogen-oxide emissions after the Bush administration’s plan was thrown out by a judge. Earlier this year, the EPA proposed national standards for mercury pollution from power plants. It’s also working on a controversial plan to regulate carbon dioxide as a pollutant.

The EPA has been a convenient punching bag for electricity companies, which have been arguing that onerous regulation is pushing up prices and giving electricity companies too little time to shutter older plants. But, the administration has listened, at least in part, to their concerns. In early September, President Obama gave a two-year reprieve to utilities on tougher ozone regulations because of fears the rules might harm the fragile economy.

And, a report in August by the nonpartisan Congressional Research Service countered some of industry’s claims of gloom and doom. That report noted most of the plants that will be affected are coal-fired facilities that are more than 40 years old—many of which are already being closed or have been upgraded to deal with toxic emissions.

The report also states that many of the new rules are the result of court rulings mandating regulation. “Some may question why EPA is undertaking so many regulatory actions at once, but it is the decades of regulatory inaction that led to this point,” the report notes.

BY: Laura Colarusso

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