Scottsbluff Star-Herald. April 8, 2015.
Utility costs: Single-minded focus on coal isn’t such a bargain for consumers
Nebraska energy moguls like to brag that we’re the only public power state in the nation. Without all those investors to extract profits, you’d think we’d have the nation’s lowest electrical rates.
But that’s not the case.
In fact, residential rates charged by our government-run utilities have jumped an average of more than 20 percent since 2008, according to a recent report in the Omaha World-Herald. Prices for industrial users have spiked even higher. Over the past six years, only four states have seen bigger price hikes. Nebraska’s no longer even in the top 10 for best electric rates.
The state’s energy industry dismisses the shift as a cyclical thing, nothing to worry about. They point out that last year’s rates remained nearly 16 percent below rates nationally, and 4 percent below the Midwest region.
But Nebraska is surrounded by states that have turned to clean energy sources, including wind power, while Nebraska utilities cling to coal and nuclear sources for most of their electrical generation. That’s in part because those plants can be powered up to base levels and left there, without much need to cope with the variability of wind. Because the wind doesn’t blow at the same speed all the time, they contend, wind energy can’t exist without full redundant backup from those other sources of power. Using that rationale, they argue that wind energy is too expensive.
But private utilities that use wind energy often rely on other forms of backup, such as hydropower. When the wind quits blowing, they release more water from dams. Others use natural gas generators that can be fired up quickly to even out shifts in generation and demand. In recent years, developments in the booming American petroleum industry have made natural gas abundant and cheap. Prices fell by almost two-thirds between 2008 and 2012, making power from natural gas more competitive with coal and nuclear. Nebraska doesn’t generate much power with natural gas.
Despite concerns about global warming and emissions from coal plants, global nuclear disasters and even ongoing problems with nuclear plants in Nebraska, the state’s utilities continue to place most of their bets on coal and nuclear power - although polls have shown the public, which is supposed to benefit from all that nonprofit power, favors more development of clean energy. Since the turn of the century, Nebraska utilities have poured $1.8 billion into new coal generation and into extending the lives of existing nuclear plants. Rate increases to cover those costs came at a time that the recession reduced demand nationwide for electricity - and cut utility revenues.
Meanwhile, the cost of coal was climbing. The average per-ton coal costs for Nebraska’s utilities climbed by nearly two-thirds, the biggest increase for any state in the nation, according to federal data. Instead of paying more Nebraska ranchers to host wind farms on their land, most of Nebraska’s energy revenues enriched out-of-state coal producers.
The proliferation of wind farms elsewhere in the region brought more competition to the energy market. Nebraska utilities found it harder to sell their excess power to utilities in other states, sales that had been subsidizing lower rates for Nebraska consumers. By 2012, Nebraska Public Power District’s average price for exported electricity fell from nearly $50 per megawatt/hour to just $20. So your rates went up. By 2013, NPPD’s average residential rate topped the U.S. average.
As the world and the U.S. pursue responsible policies to slash carbon pollution and move away from fossil fuels, clean energy will continue to bring jobs and opportunity to states that embrace new technologies. At the same time, reducing carbon and other pollution from aging plants like Nebraska’s will be costly. Advances in new energy-saving appliances and similar technologies and development of more competitive power generation will make it harder for Nebraska and other states that rely heavily on fossil fuels to ever get back into the energy export market.
Iowa, by contrast, is one of the nation’s leaders in wind power. It generated 5,866 megawatts of power with wind energy at the end of 2014, compared with 812 for Nebraska. MidAmerican Energy, the for-profit private utility that serves Council Bluffs and much of western Iowa, in recent years has offered cheaper electricity than Nebraska’s public utilities. Its rates have remained flat for more than a decade.
A dozen states produce 80 percent of the nation’s wind energy, using generators that don’t require fuel by the trainload. Nebraska, which has some of the best wind potential in the nation, is bordered by four of them. Our energy bosses can offer plenty of excuses for why they’ve largely ignored the nation’s clean-energy boom. What they should have to explain is why their for-profit competitors are finding better ways to produce affordable electrical power.
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Lincoln Journal Star. April 12, 2015.
Nebraska losing big-time
Nebraska conservatives are sticking to their principles by refusing to expand Medicaid to the working poor in the state. A clear-eyed look at the situation shows the cost of their stance can be measured in billions of dollars.
The decision to turn down the federal dollars available under the Affordable Car Act is not entirely without purpose or logic, of course.
Nationally, the battle over the ACA rages on. Conservatives have dug in their heels, promising to repeal the law. The results of the last election gave them heart. Perhaps in 2017 they will control the White House and Congress. A ruling expected soon from the U.S. Supreme Court could require a massive overhaul.
Nonetheless, now that expansion of Medicaid in Nebraska is dead in the Legislature for this year - the third consecutive defeat - it’s appropriate to reflect on the Nebraska impact of this ideological battle over the proper role of the federal government in health care.
For starters, it’s necessary to observe that as much as conservatives detest the ACA, it is the law of the land.
That means that Nebraskans are already paying for it, even though almost every prominent elected official in the state tells them they can’t afford it. And as things stand, Nebraskans are not getting anything for their money.
Let’s tick off some of the costs.
- Simply put, Nebraska is leaving money on the table. Under the law, the federal government will cover 100 percent of the cost of the Medicaid expansion until 2016. Then it will gradually be lowered to 90 percent. Gov. Pete Ricketts and other leaders insist, with some evidence, that the federal government cannot be trusted to live up to its promises. It’s worth pointing out, however, that in the various expansion plans proposed by Sen. Kathy Campbell of Lincoln, Nebraska’s participation would quickly terminate if the federal promises are not met.
Next year alone the federal government would have returned $375 million directly to Nebraska if Medicaid were expanded under Campbell’s Medicaid Redesign Act. Two studies, one in 2012 by the University of Nebraska Medical Center and one this year by Drs. Allan Jenkins and Ron Konecny at the University of Nebraska at Kearney, have pointed out that the infusion of federal dollars will generate hundreds of millions of dollars worth of economic activity in the state.
- The loss of federal dollars because of Nebraskans’ refusal to expand Medicaid hits rural doctors and hospitals particularly hard. They are losing income. The rural health care system is fraying, which affects everyone - including rural Nebraskans with great insurance coverage.
- Perhaps the most widely understood benefit of Medicaid expansion is that uninsured Nebraskans would get coverage. Something that many forget is that under federal law those uninsured Nebraskans cannot be denied care. It’s just that providers must do it without compensation. It’s a hidden tax reflected in higher bills for the insured.
Put bluntly, Nebraskans are losing big-time - billions of dollars - for the state’s refusal to expand Medicaid. The stand may be principled, but it’s not pragmatic, and it’s not prudent.
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The Grand Island Independent. April 9, 2015.
Progress being made on state prison reform
Gov. Pete Ricketts and Scott Frakes, the new Department of Correctional Services director, are making fast strides in fixing the sentencing mess that was found in Nebraska’s prison system.
Last year, the Omaha World-Herald discovered that 750 prison sentences were miscalculated and that about 200 inmates were released early from prison. The reports revealed a culture in the corrections system that ignored court rulings and seemed designed to reduce the prison population at any costs.
Ricketts and Frakes want to make sure that doesn’t happen again.
The governor announced this week that the corrections system is receiving an upgrade to its computer software to improve automation of sentence calculations that will be completed by October.
This automation will remove the manual adjustment of sentences and the misinterpretation of court rulings that were being made. The upgrade will close the gaps in the old system where the errors were allowed to be made.
Ricketts and Frakes said the upgrade will make the following changes:
- Multiple offense calculation will be automated.
- “Good time” manual adjustments will be eliminated.
- recalculation history will be tracked.
The software upgrade is a wise, common sense change that will minimize the risk of human error entering the system. Ricketts and Frakes deserve praise for doing it so quickly.
The previous administration would hem-and-haw and spend its time denying there was a problem. Ricketts is setting out to fix problems. The cost of the upgrade is $500,000, but it is well worth it if it restores some integrity to the state’s prison system.
And with revelation after revelation coming out last year about flaws in the state prison system, restoring integrity must be a priority. The automation of sentence calculation should remove politics from the process and make sure the sentences given by judges are being carried out.
Ricketts is delivering on his promise to bring about prison reform and good for him that he’s not delaying but attacking the problem.
Meanwhile, the Legislature is considering three bills dealing with prison reform. One, LB605, would increase the use of probation for nonviolent offenders, provide greater opportunity for parole supervision and require a period of supervised release for felony offenders before they complete their sentence. Supporters says these measures would in five years reduce the prison population to 140 percent of design capacity.
The other measures are LB173, which would reduce the use of “mandatory minimum” sentences, and LB598, which would create the position of “inspector general” of corrections.
It’s good to see the governor and Legislature making movement in addressing prison problems. Whether these steps will be enough is unknown, but they are a good start.
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McCook Daily Gazette. April 10, 2015.
Obama penalty finally gets real
“Why should I?pay for something I?don’t need,” one young worker was heard to remark when she found out the Affordable Care Act requires her to purchase health insurance.
That’s the whole idea of Obamacare - if everyone has to buy it, the cost of health care will be spread out among more people, theoretically making it “affordable” for everyone.
The bill is finally coming due with this year’s tax returns.
If you didn’t have health insurance in 2014, you had to pay a penalty this year. This year, it was the higher of $95 or 1 percent of taxable household income. Next year, the fine will be even larger.
The issue was complicated in Nebraska and Iowa, where a large health insurance company failed because of a “liquidity crisis,” leaving 120,000 without insurance. And, worried about added pressure on the Nebraska budget, the Unicameral recently turned down a move to expand Medicaid under the ACA, leaving more thousands more without coverage.
Meanwhile opponents are preparing a major campaign to revoke the ACA. Will Congress kill Obamacare, despite its popularity among those with pre-existing conditions, older children still able to use their parent’s health insurance and other advantages?
Stay tuned, and keep an eye on next year’s tax return.
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