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Gas taxes, electrics and hybrids – is Michigan paying attention?

17 Dec 2014

Tesla

A sharp, environmentally friendly car, but also a “free rider”?

Everyone agrees that Michigan’s roads are in awful shape.  Everyone seems to agree on the amount of money to get them into good shape and keep them there (an additional $1.2 Billion a year – although MDOT argues that it may be closer to $2 Billion/year).  What no one seems to be able to agree on is how to pay for that.  With a week left to go this year (and I wonder why they aren’t working through the 31st on this), the House has passed two bills and the Senate has passed another.

Michigan, desperate to fund much-needed road repairs, appears unwilling to take on this issue

The first House bill would amend the General Sales Tax Act to eliminate, over 6 years, the sales tax on motor fuels. The proposed exemption would first reduce the portion of the sales tax that existed before the approval of Proposal A on March 15, 1994. After January 1, 2021, eligible fuel would be exempt from the sales tax. The Legislature’s own financial analysis shows reductions in State and local revenue by approximately $1.1 billion by fiscal year 2021-2022.  The second bill would amend the Motor Fuel Tax Act to replace the current excise taxes on gasoline and diesel fuel with a single excise tax that would be adjusted annually.  The current gasoline fuel tax is 19 cents per gallon and under the bill, the tax rate could go up every year but could not exceed 32.5 cents.

the number of miles driven is a good proxy for wear and tear on the roads but I wonder if there should be some weighting based on, well, vehicle weight

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Detroit’s Carbon Footprint – now what?

18 Nov 2014

Not a carbon footprint

Not a carbon footprint

A couple of years ago, my son was watching a cartoon where one character discussed his villainous carbon foot print (a giant foot).  This showed me both how widespread the use of the term “carbon footprint” had become and how little anyone seems to know what to do with or about that information.  A group at the University of Michigan recently released findings calculating the City of Detroit’s cumulative carbon footprint and presented their report to Mayor Duggan’s office.

Not surprisingly, the study reported that some 66% of the City’s emissions come from stationary sources including residential and commercial buildings and another 30% result from transportation. Those are known to be large sources of emissions.

What I found interesting is that 41% of the city’s total emissions are produced in just 4 of the City’s 33 ZIP codes – primarily from the City’s southwest, midtown and downtown areas. Citywide, greenhouse gas emissions totaled 10.6 million metric tons of CO2 equivalents in 2011 and 2012. According to the report, if you drove from Detroit to Ann Arbor 60 times, your car would emit roughly one metric ton of CO2.  Also interesting is that, on a per capita basis, Detroit’s 2012 emissions are below average when compared to data previously collected from 13 other U.S. and Canadian cities. Detroit’s per capita emissions ranked 9th-lowest among that group—below Cleveland, Denver, Pittsburgh, Ann Arbor and Washington, D.C.  Per capita emissions were lower in Baltimore, Boston, Minneapolis, Chicago, Philadelphia, Toronto, Seattle and New York City. That one always surprises, but New York with its many tall buildings is surprisingly efficient on a per-capita basis. The report shows that electricity use contributed 45% to 2012 citywide emissions, in large part because of DTE Energy’s fuel mix, which includes 76% coal.

Now that we know where the City’s “low hanging fruit” of CO2 emissions can be found, the City may be able to work on assisting its property owners and businesses to reduce those emissions, which typically go hand-in-hand with cost savings.  That’s often the best way to sell such changes – not based on an environmental change, but based on an economic one.  One more thing for Mayor Duggan’s team to work on.

Lake Erie – so is it Ohio’s fault?

22 Aug 2014

t1_11246_1533_LakeErie_143_250mThe recent shutdown of Toledo’s water system due to an algal toxin in the water caught everyone’s attention.  Our friends at Dragun note that the Toledo water problem was triggered by some odd weather, but the algal source problem remains out there.   The MDEQ announced this month a five point plan to protect the lake: (more…)

Now this is smart…..

1 Jul 2014

smart meter; smart grid technology

Smart Meter

The grid gets smarter.  In Close Encounters of the Third Kind, just before they send Richard Dreyfus out in the middle of the night, there’s a short scene in a control room where the power company management are discussing where the power outages are and where to deploy their repairmen (hence Richard’s close encounter). (more…)

Climate change and infrastructure

27 May 2014

bumperstickerAfter that 100 year winter we just came out of, and the potholes it left behind, everyone seems to be talking about infrastructure.  Even the Michigan Legislature and Chamber of Commerce are supporting tax increases to support road and bridge repairs.  While potholes are annoying, sinkholes and bridge failures can be some pretty serious stuff, as has been recently reported.   President Obama has also spoken recently about infrastructure investment as he asks Congress to appropriate additional highway funds.

There has also been a slew of recent news about climate change including a national assessment report and reports of major antarctic melting.  Given all this news, our investments in infrastructure should take climate change into account. We all know about freeze-thaw and the havoc it can wreak on our roads and bridges. With weather becoming less predictable and more extreme, as we rebuild our infrastructure, we certainly need to think about doing it right the first time including:

  • Designing tougher, more resilient, lower maintenance roadways, bridges, facilities and roadsides;
  • Incorporating materials which will perform more consistently in weather extremes;
  • Better controls of runoff including pavement redesign and strengthening drain, river and stream banks and ditches to prevent erosion;
  • Stronger and lower maintenance bridge design;
  • Changes in roadside vegetation to ensure survival and water uptake during floods as well as drought and erosion resiliency;
  • Larger capacity pumps/pump stations to prevent freeway flooding; and
  • Better sewer and water lines to prevent failures as we experience more freeze-thaw, deeper frosts and drought conditions.

While the east and west coasts are expected to take the biggest climate-based hit (think Katrina, Sandy and California droughts and wildfires) drought, higher temperatures and stronger storm events threaten roads and we have already seen Great Lakes levels impact shipping and commerce.  A recent government report discussed the likely impacts on energy infrastructure including:

  • increased demands for electricity;
  • greater stress on the grid as we experience stronger storms; and
  • power plants’ vulnerability to water shortages.

From roads to utility lines, water lines and sewers, we are on the cusp of a brave new world.  I, for one, think that if we are about to invest billions in putting Michigan back together after many decades of neglect, we ought to do it with our eyes on the future and do it right the first time.  If that costs more, it will be worth it in failures and crises avoided down the road and will provide a base from which Michigan’s economy can grow.

Winter slows composting

26 Apr 2014

10173295_10202676647935551_213056712_nDuring the recent warm-up, I checked on my backyard composters.   I have to admit  that, during the polar vortex of the last few months, I didn’t do much composter turning and, when I tried, I found that the contents were frozen solid!

Basically, the compost is in the same condition it was last fall – which is to say partially composted but nowhere near “garden ready.”  So, my Spring resolution is to get back to composting, to turn the composters daily (so far 5 days in a row) and to have a couple of good batches of compost to report on before mid-summer.

Change is hard – with great technology comes great upheaval

23 Apr 2014

carcharger

For the last 60 – 70 years, we have lived in an era of significant stability.  That seems to be over.  We’ve all seen how the internet has changed certain businesses (music, newspapers and bookstores).  Technology can be a huge boon but it can be quite disruptive.

The transition from gasoline to electric or hybrid vehicles has been somewhat bumpy as governing bodies struggle with whether dealerships are required and how to pay for roads when less (or no) gasoline will be used.  This is a growing issue as more electric and hybrid vehicles take to the road and as the condition of our Michigan roads continues to cry out for repairs.

As I’ve blogged about before, recent rhetoric suggests that Oakland and Macomb Counties may declare their independence from the DWSD.  With both counties now spending money to evaluate their options, what happens next is less clear. Given that DWSD has apparently not set its rates high enough to cover all the infrastructure improvements needed over the next 5 – 10 years, it is possible (although perhaps unlikely) that a Macomb-Oakland system might actually cost less to develop, construct and operate than the DWSD system.  Such a separation could lead the DWSD to owning over-sized water and waste treatment systems relative to their customer base and the oldest waste and water lines which are likely most in need of repair.  Given DWSD’s well publicized collection issues, this has to be making the investment community nervous as reflected in two investment firms’ recent subpoenas.  This much turmoil would seem to make the DWSD’s recent RFP less appealing than usual.

as with prior technical revolutions, change tends to be messy and the larger the change, the greater the mess

Finally (for the moment), we have seen many advances in the development of solar energy – some of which we’ve discussed on this blog – while those are exciting, they, like changes to gas driven cars and changes to 100+ years of centralized water and sewer systems, challenge the status quo.  For over 75 years, utilities have generated and supplied the electricity and natural gas that we consume in our homes and businesses from centralized points. As part of the deal, those same utilities have maintained the infrastructure needed to both generate and transmit gas and electricity.  So, what happens when people can start generating electricity on their own roofs?  Some hail it as a triple win (saving money, the environment and societal benefits) but most solar generators stay “on the grid” and as a result sometimes are contributing electricity to the grid and other times are drawing on the grid.  Under most systems, including Michigan’s, smaller generators can sell their electricity back to the grid at the utility’s retail price – so called “net metering.”

The ability to sell excess power back at the retail -not wholesale- price, raises the question of who pays for the infrastructure necessary to provide the electricity to those on the grid.  Utilities argue that those installing solar are not paying their “fair share” of such costs.  There are those who say that the price of electric service includes roughly 50% for non-generation expenses.  Some experts argue that there is no such “cost-shifting” occurring because there are savings on power plants, transmissions lines, lost energy as well as the ability to meet greenhouse gas reduction goals without utilities having to make the capital investment.  This is a tough debate and is not something easily reduced to 60 second soundbites and at present is being decided on a state by state basis.

Ultimately, the challenge of existing infrastructure combined with legacy costs makes the transition in technology and improving efficiency much harder and far more political than a “free market” would prefer.  But, as with prior technical revolutions, change tends to be messy and the larger the change, the greater the mess.