{"id":4500,"date":"2013-07-04T10:00:47","date_gmt":"2013-07-04T14:00:47","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=4500"},"modified":"2013-07-06T20:06:02","modified_gmt":"2013-07-07T00:06:02","slug":"coal-and-natural-gas-cost-effective-vs-energy-efficiency-wind-and-solar-power-stephanie-coffin-so-2013-05-22","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2013\/07\/coal-and-natural-gas-cost-effective-vs-energy-efficiency-wind-and-solar-power-stephanie-coffin-so-2013-05-22.html","title":{"rendered":"Coal and natural gas cost effective vs. energy efficiency, wind, and solar power? –Stephanie Coffin @ SO 2013-05-22"},"content":{"rendered":"

\r\nSO CEO Tom Fanning is a true believer in “all of the above”,\r\nyet a skeptic about natural gas.\r\nHowever, he really doesn’t have much faith in renewables,\r\nas he indicated at the\r\n\r\n22 May 2013 Southern Company Stockholder Meeting<\/a>\r\nand even more strongly in the Wall Street Journal.\r\n<\/p>\r\n

\r\n

\r\n\r\n\"retirees<\/a>\r\nThis question is from Stephanie Coffin of Atlanta, Georgia, and she\r\nholds 18 shares of stock.\r\n<\/p>\r\n

\r\nTF:\r\nHello, Stephanie.\r\n<\/p>\r\n

\r\nSC:\r\nHow are you, Tom?\r\n<\/p>\r\n

\r\nTF:\r\nDynamite. How are you?\r\n<\/p>\r\n

\r\n\r\n\"your<\/a>\r\nSC:\r\nLast year, I came to this meeting to ask a question and to listen to\r\nthe Southern Company reports. And so before I came I got to thinking\r\nabout what has changed since the last meeting. I think two things,\r\nand then I’ll ask my question.\r\n

\r\nThe first is the chairperson’s salary\r\nincreased 34 percent, over $13 million a year. I’m sure the retirees\r\nand stockholders in the room wonder about the $13 million salary and\r\nsee that as negative PR in the face of continuing recession. $13\r\nmillion a year, most of us are on fixed income. I mean, your income\r\n\r\n\"My<\/a>\r\nis fixed, too, but it’s very high. Mine is pretty low and we all\r\nhave to pay electric bills.\r\n

\r\nThe second change, and then I’ll ask my\r\nquestion, is that now 70 — 97 percent of all scientists\r\nbelieve that climate change — that is, global warming —\r\nis real and caused by human activity and this is a big shift. Last\r\nyear we were the climate deniers, we’re in control, and now 97\r\npercent of all scientists say it’s real, it’s coming, you better get\r\nready.\r\nIn the face of this scientific consensus the Southern Company\r\nhas maintained its reliance on fossil fuels, mountaintop coal, old\r\ncoal plants and pushing nuclear power with huge wattage demands and\r\nthe dangers of nuclear wastes.\r\n

\r\nWhile I applaud the Southern\r\nCompany’s baby steps buying solar from California and wind from\r\nOklahoma, the rate payers and stockholders have moved on. The clamor\r\nfor change indicated by standing room only in Public Service\r\nCommission hearings, demonstrations against nuclear energy and the\r\nfossil fuel divestment campaigns indicate a negative cast over the\r\ncompany and these issues raise real questions about the current\r\nleadership.\r\n

\r\n\r\n\"Big<\/a>\r\nMy question speaks to this lack of leadership and is\r\nfairly technical. Tom, the Southern Company seems to be making bets\r\non long-term coal and natural gas prices that defy rational analysis\r\nand common sense. Georgia Power predicts that the price of Powder\r\nRiver Basin coal will not increase over the next 30 years, but most\r\nof the easily mined coal in the Powder River Basin has been mined\r\nwith a possibility of raising prices. Natural gas prices also have\r\nbeen volatile, doubling from their lows around this time of year\r\n\r\n\"SO<\/a>\r\n— this time last year — and are likely to continue to\r\nmove upward in the future.\r\n

\r\n\r\n\"Wind<\/a>\r\nHow\r\ncan the Southern Company believably claim that coal and natural gas\r\nwill continue to be cost effective compared to energy efficiency,\r\nwind and solar power? Thank you.\r\n

\r\nTF:\r\nThank you. Appreciate it. Let me hit the compensation question\r\n\r\n\"Compensation<\/a>\r\nfirst. So the increase in my compensation was really due to a\r\npresent-value calculation of a change in pension benefits. My cash\r\ncompensation reduced 16 percent this year. Recall that something\r\nlike 84 percent of our compensation is performance based. I do have\r\na base salary but everything else is performance based. And compared\r\nto, say, the year before, the metrics of the company were not as\r\ngood. For example, the price of our stock compared to our peers as I\r\nshowed you earlier, 2012 versus 2011 performance, 2010 performance.\r\n\r\n\"Increase<\/a>\r\nSo actually my cash compensation went down 16 percent and the real\r\nchange that you’re referring to is a change in the present-value\r\npension calculation. So that was thing one.\r\n

\r\n\r\n\"Carbon<\/a>\r\nThing two, I guess, is\r\nagain kind of a multilayered question. Let me — let me say it\r\nthis way. You — you point out a lot of very interesting facts\r\nabout, first, carbon. Southern Company evaluates carbon in all the\r\nportfolio planning we do and I talk about all the arrows in the\r\nquiver or all of the above or the full portfolio; we take into\r\naccount a host of unknowables going forward.\r\n

\r\n\r\n\"Natural<\/a>\r\nFor example, we take\r\ninto account where our gas prices may or may not go, where coal\r\nprices may or may not go, what may happen to load; we actually take\r\ninto account the cost of carbon into our evaluation.\r\n

\r\n\r\n\"Other<\/a>\r\nSo we take\r\nthose things into account when we come up with our optimal\r\nportfolio. One of the reasons that you as stockholders — I’m\r\nglad you own Southern Company stock or you wouldn’t be here —\r\nbut I bet you own other stocks. You don’t put all your eggs in one\r\nbasket. Well, we do the same thing with our fuel types.\r\n

\r\n\r\n\"Natural<\/a>\r\nThere is\r\nnobody who can sit here and tell me what’s going to happen with\r\nnatural gas and the consensus you can point out about natural gas\r\nwere exactly right. And, in fact, I did a weekend interview in The\r\nWall Street Journal and unfortunately — it was actually about\r\nthe full portfolio but they really picked up on a little bit of my\r\ncautious attitude about putting too many eggs in the natural gas\r\nbasket and they titled the article\r\n\r\n“The Natural Gas Skeptic.”<\/a>\r\nThis is when everybody said it was going to be free\r\nforever. There’s no such thing for any of the fuel types. That’s why\r\nwe must have a balanced portfolio. Next question.\r\n\r\n\"No<\/a>\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nFor “any of the fuel types”. But solar and wind don’t require fuel.\r\nand the price of solar keeps going down while\r\nsolar installations go up (everywhere but Georgia) like compound interest.\r\n<\/p>\r\n

\r\nJoseph Rago wrote for WSJ 8 June 2012,\r\n\r\nTom Fanning: The Natural Gas Skeptic:\r\n‘Nobody can sit here and tell me that it’s going to be safe forever, safe in terms of economics and reliability,’ says the Southern Company CEO.<\/a>\r\n<\/p>\r\n

\r\n

\r\n“If conventional coal is not going to get done, and there’s only a\r\nfew people who can do nuclear—this ain’t a job for\r\nbeginners—you’re left with gas and, heaven forbid,\r\nrenewables?” He cautions: “Now I’m as excited about renewables as\r\nanybody. But they’re a niche play.”\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nAs Fanning knows, that’s not what\r\n\r\nEdison Electric Institute says about solar power<\/a>.\r\nMore about that later.\r\n<\/p>\r\n

\r\nThanks to Southern Company for putting up a\r\n\r\ntranscript<\/a> which,\r\nwhile like all transcripts isn’t always 100% accurate\r\n(I’ve made some corrections in punctuation and added paragraph breaks),\r\nmakes blogging a lot easier.\r\n\r\nSO’s video<\/a> is still in opaque brightcove format that,\r\nunlike YouTube or Vimeo, doesn’t permit linking to specific times,\r\nso you’ll have to manually scan to \r\n1 hour, 3 minutes, and 54 seconds\r\n55 minutes and 12 seconds<\/strike> to see Stephanie Coffin speak.\r\nAll stills here are from SO’s video, taken by me as fair use.\r\n<\/p>\r\n

\r\n -jsq\r\n<\/p>","protected":false},"excerpt":{"rendered":"SO CEO Tom Fanning is a true believer in “all of the above”, yet a skeptic about natural gas. However, he really doesn’t have much faith in renewables, as he indicated at the 22 May 2013 Southern Company Stockholder Meeting and even more strongly in the Wall Street Journal. This question is from Stephanie Coffin […]","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[216,14,264,265,18,558,6124,104,23,24,36],"tags":[6164,6582,2368,2373,8753,6263,6583,8704,6581,8754,8755,6580,8701,8708,8781,548,8702,12,562,8737,2369,6584,8713,6579,2367,8714,108,8716],"class_list":["post-4500","post","type-post","status-publish","format-standard","hentry","category-coal","category-economy","category-energy-conservation","category-energy-efficiency","category-georgia-power","category-germany","category-natural-gas-2","category-nuclear","category-renewable-energy","category-solar","category-wind","tag-22-may-2013","tag-basket","tag-callaway-gardens","tag-ceo-thomas-a-fanning","tag-coal","tag-compensation","tag-diversify","tag-economy","tag-eggs","tag-energy-conservation","tag-energy-efficiency","tag-fixed-income","tag-georgia","tag-georgia-power","tag-germany","tag-john-s-quarterman","tag-lake","tag-lowndes-area-knowledge-exchange","tag-natural-gas","tag-nuclear","tag-pine-mountain","tag-portfolio","tag-renewable-energy","tag-salary","tag-shareholder-meeting","tag-solar","tag-southern-company","tag-wind"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p585fK-1aA","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/4500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/comments?post=4500"}],"version-history":[{"count":5,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/4500\/revisions"}],"predecessor-version":[{"id":4557,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/4500\/revisions\/4557"}],"wp:attachment":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/media?parent=4500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/categories?post=4500"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/tags?post=4500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}