Category Archives: analysis

Smart grids and dumb power lines

Back in the 1970s, a young college professor named Paul Wellstone joined the battle against a high voltage power line in rural Minnesota. He and fellow professor and activist Barry M. Casper later wrote Powerline: The First Battle of America’s Energy War. That war, and the battles over power lines continue, with the latest MN Public Utilities Commission (PUC) ruling last week allowing yet another power line to march across Minnesota.

The Emperor’s Old Clothes

Today’s battle in Minnesota centers on two giant power line proposals, ITC’s “Green Power Express” and Xcel’s CapX 2020. They both claim the cloak of green energy, but it’s long past time for public officials to recognize that these particular emperors are not wearing any clothes. Here’s why:

First, the power companies boast that the new, giant power lines will carry renewable, green energy. The catch: they are not required to do so. Most electricity in this country is generated by burning coal, so that’s what is most likely to move over the new “dumb” power lines.

Second, they claim that new transmission lines are needed because the nation needs more electricity. That’s not true either. According to NPR, which has just completed a 10-part series on “Electricity in America:”

Power companies are planning to beef up the nation’s electricity transmission grid. At the same time, conservationists are trying to reduce the vast amount of power wasted in Americans’ homes and offices. That raises a question: If we simply used energy more efficiently, would we need to spend billions of dollars on a new grid?

NPR quotes Revis James, who works for the industry-funded Electric Power Research Institute, who assures us that demand for electricity inevitably will keep on growing. It fails to mention that U.S. Department of Energy figures show that national electricity use is already falling — by more than two percent in January 2009 compared to January 2008, marking the sixth consecutive month of falling electricity use. Instead,

Xcel and ITC claim that CapX 2020 in southern MN and the “Green Power Express” across the northern part of the state will transport green energy from Midwestern states to the supposedly power-starved states east of here, which lack any wind, solar or geothermal resources. Never mind that Chicago — one of the supposed beneficiaries — is well-known as “the Windy City.” Never mind that a recent study shows that “at least half of the fifty states could meet all their internal energy needs from renewable energy generated inside their borders, and the vast majority could meet a significant percentage.” In fact, says the study:

However, while significant variations in renewable energy among states exist; in most cases, when transmission or transportation costs are taken into account, the net cost variations are quite modest. Homegrown energy is almost always cheaper than imports, especially when you factor in social, environmental and economic benefits.

Smart Grids and Smart Meters

There are other, better ways to power the nation. The two best directions — increasing energy conservation and encouraging local ownership of local renewable energy projects — do not generate large profits for utility companies.

Smart grids and smart electric meters give consumers more information as a means reducing peak demand and overall energy use. The Washington Post reports:

Smart grid refers to an array of switches, sensors and computer chips that will be installed at various stages in the energy-delivery process — in power stations, in electricity meters, in clothes dryers — in the next two decades, if the vision holds and the technology works.

To flatten spikes in demand, smart meters will tell users when power is cheaper, in case they want to run dishwashers and dryers when it costs less. For customers who agree ahead of time, the meters can do the calculations and start the appliances automatically.

NPR’s series reports on both business and individual consumers dramatically cutting their electricity consumption through the use of smart technology. A business example comes from the home of the U.S. Green Building Council in Washington, which “should use about half the electricity of a conventional office.”

For a personal consumer’s point of view, NPR turns to Tammy Yeakel in Pennsylvania:

When PPL installed a smart meter on Tammy Yeakel’s Pennsylvania home, she cut her electric bills by 20% reported NPR.

“This is one of my favorite things,” Yeakel says, reading from the computer screen. “How does my home compare to similar homes in my area? And I’m always about $120 less than everybody. So that’s kind of neat. That’s like vacation.”

Tom Stathos from PPL explains that the meters go hand-in-hand with the company’s website, which explains how to cut electricity consumption:

“It’s not a matter of doing without — it’s just a matter of making smart choices,” he says. “The meter is the absolute direct connection with the customer. So this is definitely the start of a smart grid,” Stathos says. With information from the smart meters, PPL is launching a new pricing program. It’s offering two rates — one during times of peak energy use, and a cheaper, off-peak price. The company hopes this encourages customers to use less power when electricity is priciest. And Stathos says that’s just a beginning.

The Obama administration wants to use stimulus money to help install smart meters and promote a smart grid.

Keeping Energy Local

According to George Crocker, Executive Director of the North American Water Office (NAWO), a non-profit organization that has worked on energy issues for more than 25 years:

The old way of doing business was to hook up a few very large central station power plants, mostly coal and nuclear, to high voltage powerlines to serve energy consumers in distant cities. The new way, as this study documents, is to serve those same energy consumers by strategically locating smaller locally owned dispersed renewable energy facilities.

One way to encourage local development of renewable energy projects is through a feed-in tariff, “a price for renewable energy high enough to attract investors without being so high it generates windfall profits.”

According to the “Institute for Local Self Reliance:

Denmark and Germany both used a feed-in tariff to drive renewable electricity generators to more than 15 percent market share. This policy also resulted in large-scale local ownership, with near half of German wind turbines and over 80 percent of Danish ones owned by the residents of the region.

Power Companies and Power Lines

Meanwhile, power companies keep pushing forward with plans to spend billions of dollars on hundreds of miles of power lines. Public utility commissions, including the Minnesota PUC, are still giving them almost everything they ask for.

We are on the hook for this boondoggle. The people who live under or near the power lines pay the highest price, as their land is taken and their e As consumers of electricity, we pay for the new power lines through higher rates. As taxpayers, we pay directly for subsidies for construction.

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Pandemic and panic: Swine flu Q&A

The media has been saturated with swine flu news. Here’s our round-up of questions and answers and a list of places to go for information, including some of the big swine flu news centers, official sources, and some lesser-known information.

The local angle: Minnesota has one suspected case of swine flu in Cold Spring, as of April 29, and local officials closed schools as a precaution. Official Minnesota, however, wants a name change for the new virus. Instead of “swine flu,” Minnesota’s Health Commissioner, Dr. Sanne Magnan, is calling it “H1N1 novel influenza.” Officials are responding to fears that are driving pork prices down, pointing out that you don’t get swine flu from eating pork.

Questions and answers

How serious is H1N1 “swine” flu compared to “regular” or seasonal flu?

We don’t know yet. The symptoms for both types seem similar — fever, cough, sore throat, body aches, chills and fatigue, and sometimes diarrhea.

We do not have enough information yet to say that swine flu or H1N1 is or is not more deadly than seasonal flu. People have died from H1N1, but people also die from “regular” seasonal flu — about 30,000 every year in the United States and from 250,000 to 500,000 worldwide.

What is this H1N1 or swine flu virus?

Both seasonal flu and this new strain of flu are caused by a Type A H1N1 virus. The “H1N1 novel influenza” virus contains different genetic material. The best explanation I have seen comes from BBC:

H1N1 is the same strain which causes seasonal outbreaks of flu in humans on a regular basis.

But this latest version of H1N1 is different: it contains genetic material that is typically found in strains of the virus that affect humans, birds and swine.

Flu viruses have the ability to swap genetic components with each other, and it seems likely that the new version of H1N1 resulted from a mixing of different versions of the virus, which may usually affect different species, in the same animal host.

Pigs provide an excellent ‘melting pot’ for these viruses to mix and match with each other. …

Most humans have never been exposed to some of the antigens involved in the new strain of flu, giving it the potential to cause a pandemic.

Is there a vaccine to prevent the newest strain of H1N1 flu? Can it be treated?

There is no vaccine yet, but work on developing a vaccine has begun.

H1N1 flu can be treated. Tamiflu and Relenza both seem to work, especially if treated in early stages — during the first 24-48 hours — but may also have benefit if given later in severe cases. But viruses can develop resistance to these medications, and that’s another one of the unknowns.

What makes this H1N1 flu so scary?

We don’t know what the virus is going to do to people. And that’s scary. We do know that people do not have immunity to this strain of H1N1 because it is a new virus, and because it is being transmitted person-to-person, and in countries around the world.

Why did the World Health Organization raise the pandemic alert level to Level 5? What does that mean?

WHO has a six-level alert scale. Level four means that outbreaks are occurring in community clusters. Level 5 means that human-to-human transmission is confirmed in at least two different countries. Level 6 means that there is a pandemic, defined as community level outbreaks in one additional country in another region.

How is this flu spread? Can I get it from eating pork?

This H1N1 is being transmitted person-to-person, by coughing, sneezing, or by touching infected surfaces. It is not spread by eating pork.

How bad could it get?

MPR summarizes nicely:

A full-scale pandemic — like the 1918 Spanish flu — would sicken 90 million Americans, or about 30 percent of the population.

It could claim the lives of about 2 percent of those infected, about 2 million people, according to government experts. To put that in perspective, the flu typically causes about 30,000 deaths each year.

How long do we have to worry about this flu?

Typically, the flu virus is more active in cold weather, so we are coming to the end of the season in the northern hemisphere. One reason for caution: in the 1918 flu epidemic, the virus had a relatively mild effect in the spring, and then returned with greater strength and deadliness in the fall, and that’s when it killed millions.

We may not know the full impact until some time this fall or winter.

What should we do to avoid getting sick?

Avoid close contact with people who are sick. Practice good hygiene – covering your nose and mouth when coughing or sneezing, using a tissue when possible and disposing of it promptly.

Most important – wash your hands frequently and thoroughly with soap and water. Clean hard surfaces like door handles frequently.

Keeping up with the news

Major news sites

NPR Swine Flu: On the edge of a pandemic

BBC Special Reports | Swine Flu

CDC Swine Influenza (Flu)

The Great Pandemic Website

And a few interesting sidelights

Grist links the new virus to Granjas Carroll, a pig factory-farming operation located in the state of Veracruz and owned by Smithfield Foods, the world’s largest pork packer and hog producer. Granjas Carroll produced 950,000 hogs in 2008. The Washington Post reports that the first person identified as having this virus is a five-year-old boy in La Gloria, and describes the town’s suspicions:

Some residents of La Gloria blame the area’s industrial hog farms for their illnesses because they said the open-air waste pits dry out and the hot winds blow dust through nearby villages.

Scientists, however, say it is more likely that people who worked with pigs became infected and passed it on to other people.

The Biosurveillance blog claims to have been the first to report the outbreak at Biosurveillance: Swine Flu in Mexico – Timeline of Events

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Unemployment up – 8.5% or 15.6%

National unemployment rose to 8.5 percent in March, up from 8.1 percent in February, by the most conservative measure used by the U.S. Department of Labor. Employers cut 663,000 jobs in March. The total number of jobs lost since the official beginning of the recession in December 2007 is 5.1 million, with 3.3 million of those job losses during the past five months.

A second, more comprehensive, measure of unemployment puts the number of unemployed higher, at 15.6 percent. Continue reading

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Who pays Minnesota’s taxes?

Maybe it’s the influence of my daughter, immersed in her college econ class, muttering about progressive and regressive and constant taxes, and outraged to discover that the tax system actually benefits the upper one percent much more than the middle class. At any rate, when the 2009 Minnesota Tax Incidence study was released this week by the MN Department of Revenue, I expected headlines and deep analysis all over the place. Continue reading

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The budget: Obama’s ten-year plan

The White House released a 10-year, 134-page budget plan yesterday, projecting a record $1.75 trillion deficit by September 30, and pledging to cut that in half by the end of his term. According to NPR:

The deficit would remain near $1 trillion over the next two years before dropping to $581 billion in 2012 and $533 billion in 2013, the year that Obama has pledged to cut in half the deficit he inherited.

Continue reading

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Report documents mortgage discrimination in Minneapolis, St. Paul

Lenders discriminate. Housing is segregated. Communities of color are hit harder by the foreclosure crisis than anyone else. That’s the ugly face of racial discrimination in the Twin Cities revealed in a 54-page report released by the Institute on Race and Poverty at the University of Minnesota Law School.

People of color “continue to receive home loans on worse terms and at a higher cost than similarly situated white borrowers, according to “Communities in Crisis: Race and Mortgage Lending in the Twin Cities”. Higher incomes did not protect people of color from lending disparities, with high-income black, Latino and Asian applicants denied loans at higher rates than low-income white borrowers.

Very high income black, Hispanic and Asian applicants (applicants with incomes more than $157,000 per year) show denial rates higher than whites in the lowest-income category (less than $39,250 per year). The disparities are greatest for black borrowers. The denial rate for blacks with incomes above $157,000 was 25%, while it was just 11% for Whites making less than $39,250.

Prime and subprime: What they are, why they matter

“Prime loans are the standard home loans that have allowed high rates of homeownership and housing mobility in the United States. Subprime loans have higher interest rates than prime loans and often contain additional features and costs that are absent in prime loans. Subprime loan features can include prepayment penalties; adjustable rate mortgages where interest rates are adjusted periodically; interest only loans, where the borrower only pays for the interest on the principal of the loan; and balloon payment mortgages, where interest rates climb towards the end of the loan. …

“Segregated neighborhoods of color, neighborhoods where more than 50 percent of the residents are people of color, receive disproportionate numbers of subprime loans. …
Although not all subprime loans are predatory, most predatory loans are found in the subprime market.”

Borrowers of color, even if they have high incomes, “are more likely to receive subprime loans than in any white income group,” found the study, thereby increasing the amount that they pay for loans and their risk of foreclosure.

A few decades ago, homeowners typically looked to neighborhood banks for their mortgages. Then home lending practices changed. Mortgage brokers and automated underwriting meant less connection between lender and borrower. “Loan securitization,” based on sales of mortgages, spread and eventually became the basis of the current financial crisis. All of these factors made the mortgage market more complex, encouraged high risk lending, and encouraged high-risk, predatory lending.

Calling homeownership “the first step to building stability and wealth” for families, the study points out that discriminatory lending has “cost another generation of people of color the equal opportunity to join America’s middle class,” despite the 40-year-old fair housing legislation passed as a consequence of the civil rights movement.

This wealth can be leveraged in numerous ways including moving “up,” into better neighborhoods and homes, co-signing loans to ensure that one’s children become homeowners, and starting businesses.8 Racial discrimination has greatly reduced access for people of color and communities of color to these long-term wealth building benefits of home ownership.

Twin Cities: Pattern of discrimination

Discrimination in lending also has maintained and reinforced housing segregation across the country and in the Twin Cities. Twin Cities neighborhoods are highly segregated by race, and neighborhoods with higher non-white populations have less access to banks and higher percentage of subprime mortgages. Lenders tend to specialize, offering either prime or subprime loans. In the Twin Cities, bank branches are less likely to be located in minority communities, with a study by the National Community Reinvestment Coalition showing the metro area ranking last of 25 large metropolitan areas studied.

North Minneapolis shows the severity of the discrimination/subprime lending/foreclosure impact on a community. The IRD study found a foreclosure rate of two percent in Hennepin and Ramsey counties overall, but 12 percent for North Minneapolis, which it described as “the most segregated and lowest-income area in the Twin Cities.”

Banks made few prime loans in North Minneapolis, while subprime lenders dominated the market. Overall, 1.7 percent of home purchase loans were made in North Minneapolis, and 49 percent of these were subprime, compared to 14 percent subprime in the area as a whole.

For example, the region’s largest prime lender, Wells Fargo Bank, NA, made just 286 of its home purchase loans in North Minneapolis out of a regional total of 35,272. If North Minneapolis had received a proportionate amount of Well Fargo’s loans, it would have received more than twice as many loans—1.7 percent or a total of 616 loans.

On the other hand, TCF has made a disproportionately large share of loans in North Minneapolis. But even homeowners with “good” loans have been affected by the overwhelming number of foreclosures in the community, which have driven down home values and made neighborhoods less stable.

What happened to the laws?

The IRD study reviews the extensive list of laws prohibiting discrimination in housing and in lending, but finds that “The federal and state governments have not enforced fair lending laws, allowing lenders to engage in illegal discriminatory behavior with little threat of punishment.” The Bush administration rolled back enforcement, so that lenders have little fear of getting caught and, even if they are caught, pay small penalties. Private civil rights lawsuits have increased, but the expense of suing is high, and lawsuits drag on for years.

The IRD study recommends some steps to address the problem of racial discrimination in housing and lending, including calls to:

• work aggressively to end segregation;

• enforce existing laws, both federal anti-discrimination laws and Minnesota laws curbing predatory lending practices;

• strengthen the Community Reinvestment Act to “increase access to affordable, prime credit for people who live in segregated communities of color;”

• re-establish a regional Fair Housing Center to bolster enforcement of anti-discrimination laws.

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Farming by the numbers

Like numbers? The 2007 U.S. Agricultural Census has lots of fascinating numbers for anyone who farms or cares about the food system. You can go on-line to download or read everything– national numbers or a state-by-state breakdown. (Minnesota here.) Among the more interesting findings:

• Minnesota farm figures track national trends in most areas. Farm numbers increased nationally, but growth came mainly in the biggest and smallest operations. While Minnesota gained a few more farms, overall farm acreage in the state decreased by a little more than half a million acres.

• Big farms keep on growing. In MN, the number of farms with sales of more than half a million dollars went up by 2,801 farms. (The number of farms with less than $2500 in sales went up by 1,654).

• Nationally, the number of farms with sales greater than $500,000 increased by 46,000 from 2002 to 2007, while the total number of farms grew four percent to 2,204,792. That number is somewhat deceptive, as the greatest growth came in farms with sales of less than $1,000 — clearly hobby farms. (Remember that the sales figures are gross sales — a farm with $100,000 in sales has a profit margin that is far lower.) The number of farms in the $100,000 to $249,000 category shrank slightly, while all higher levels showed growth. Less than half of all farm operators said farming was their primary occupation.

• Family farm numbers declined in Minnesota. MN farms larger than 2,000 acres and those smaller than 180 acres increased in number, while the state lost about two thousand middle-sized farms. The number of MN farm operators identifying farming as their principal occupation dropped by about 20 percent, going from 50,808 to 39,628.

• Organic farms are a big growth sector. Even as the number of family farms in Minnesota continued to decline from 2002 to 2007, family-operated organic farms increased. MPR reports:

For the first time, the census of agriculture includes information on organic farms. According to the census, in 2007 there were 718 Minnesota farms producing organic crops. That’s a 66 percent gain from the best previous estimate, a 2005 state report. Jim Riddle runs an organic farm outreach program for the University of Minnesota and he said organic food should be a growth area for years to come.

“It’s still a supply and demand driven market and there’s just a very strong demand for organic products,” said Riddle.

Nationally, organic food sales have been growing at 15-20 percent per year until the recession hit, and even now continue to increase by about five percent per year.

• Nationally, farms with more than one million dollars in sales accounted for 59 percent of all agricultural production nationwide. In 2002, the million dollar farms accounted for only 47 percent of all ag sales.

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