Mississippi power plant costs cross $7.5B


The Kemper County power plant

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Kemper County power plant costs and delays highlight lignite coal gasification, syngas production, carbon capture targets, and looming rate plans as Mississippi Power navigates Public Service Commission oversight and shareholder-ratepayer risk.

 

Key Points

Costs exceed $7.5B with repeated delays; rate impacts loom as syngas, lignite, and carbon capture systems mature.

✅ Estimate tops $7.5B; customers could fund about $4.3B

✅ Carbon capture target: 65% CO2 via syngas from lignite

✅ Rate plans pending before the Public Service Commission

 

A Mississippi utility on Monday delayed making proposals for how its customers should pay for an ever-more-expensive power plant, even as the estimated cost of the facility crossed $7.5 billion.

The Kemper County power plant will be tasked with mining lignite coal a few hundred yards away from the plant. That coal is moved through a process that will convert it to syngas. The syngas is then used to drive the energy output of the plant, and the resulting electricity is then moved into the grid, where transmission projects influence regional reliability and capacity.

Thomas Fanning, CEO of parent Southern Co., told shareholders in May that Mississippi Power would file rate plans for its Kemper County power plant this month. But still unable to operate the plant steadily enough to declare it finished, Mississippi Power punted, instead asking to hold rates level for 11 months to pay off costs that have already been approved by regulators.

Mississippi Power says it now hopes to reach commercial operation in June. The plant is more than three years behind schedule, with 10 delays announced in the past 18 months. It was originally supposed to cost $2.9 billion.

The company also said monday that it will have to replace troublesome parts of the facility much sooner than expected, including units that cool the synthetic gas produced from soft lignite coal by two gasifier units, plus ash handling systems in the gasifiers.

Kemper is designed to take synthetic gas, pipe it through a chemical plant to remove carbon dioxide and other chemicals, and then burn the gas in turbines to generate electricity. It’s designed to capture 65 percent of carbon dioxide from the coal, releasing only as much of the climate-warming gas as a typical natural gas plant. It’s a key effort nationally to maintain coal as a viable fuel source, even as coal unit retirements proceed in other states.

Mississippi Power raised its estimate of Kemper’s cost by $209.4 million, with shareholders absorbing $185.9 million, while ratepayers could be asked to pay $23.5 million. Overall, customers could be asked to pay $4.3 billion. Southern shareholders have agreed to absorb $3.1 billion, which has risen by $500 million since November.

The elected three-member Public Service Commission in 2015 allowed the company to raise rates on its 188,000 customers by $126 million a year. That paid for $840 million in Kemper work, which began generating electricity in 2014 using piped-in natural gas. Some items covered by that 15 percent rate increase will be paid off in coming months, but Mississippi Power now proposes to repay costs from regulatory proceedings earlier than originally projected.

In testimony filed with the Public Service Commission, Mississippi Power Chief Financial Officer Moses Fagin said that keeping rates level would reduce whiplash to customers when rates rise later to pay for Kemper, would pay off accumulated costs more quickly and would help the company wean itself off financial support from Southern Co. while maintaining credit ratings and positioning for a possible bond rating upgrade over time.

“Cash flow is important to the company in maintaining its current ratings and beginning to rebuild its credit strength on a more independent basis apart from the extraordinary parental support that has been required in recent years to maintain financial integrity,” Fagin testified.

Spokesman Jeff Shepard said Mississippi Power is still drawing up two rate plans — one requiring a sharp, immediate rate increase, and a “rate mitigation plan” that might cushion increases amid declining returns in coal markets. He said the company isn’t sure when it will file them. Fagin suggested the Public Service Commission set a new deadline of March 2, 2018.

 

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Ontario opens first ever electric vehicle education centre in Toronto

Toronto EV Discovery Centre offers hands-on EV education, on-site test drives, and guidance on Ontario incentives, rebates, charging, and dealerships, helping drivers switch to electric vehicles and cut emissions through provincial climate programs.

 

Key Points

A public hub in Toronto for EV education, test drives, and guidance on Ontario incentives, rebates, and charging options.

✅ Free entry; neutral info on EV models and charging.

✅ On-site test drives; referrals to local dealerships.

✅ Backed by Ontario's cap-and-trade, utilities, and partners.

 

A centre where people can learn about electric vehicles and take them for a test drive has opened in Toronto, as similar EV events in Regina highlight growing public interest.

Ontario's Environment Minister Glen Murray says the Plug'n Drive Electric Vehicle Discovery Centre is considered the first of its kind and his government has pitched in $1 million to support it, alongside efforts to expand charging stations across Ontario.

Ontario's Environment Minister Glen Murray helps cut the ribbon on the first ever electric vehicle discovery centre. (CBC News)

Murray says the goal of the centre is to convince people to switch to electric vehicles in order to fight climate change, a topic gaining momentum in southern Alberta as well.

Visitors to the centre learn about how electric vehicles work and about Ontario government subsidies and rebates for electric car owners, as well as the status of the provincial charging network and infrastructure.

Visitors can test-drive vehicles from different companies and those who see something they like will receive a referral to an electric car dealership in their area.

The province hopes to have electric vehicles make up five per cent of all new vehicles sold by 2020. (Oliver Walters/CBC)

The Ontario government's Climate Change Action Plan includes a goal to have electric vehicles make up five per cent of all new vehicles sold by 2020, amid debate over whether the next wave will run on clean power in Ontario, and the discovery centre is part of that plan.

The centre is free for visitors. It's a public-private partnership funded from the provincial government's cap-and-trade revenue, with other funding from TD Bank Group, Ontario Power Generation, Power Workers' Union, Toronto Hydro and Bruce Power.

 

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Clean energy stored in electric vehicles to power buildings

Vehicle-to-Grid (V2G) enables bidirectional charging, letting EV batteries supply smart grid services to large buildings, support renewable energy integration, reduce battery degradation, and optimize demand response for efficient, resilient power management.

 

Key Points

Vehicle-to-Grid (V2G) is bidirectional EV charging that feeds the grid and buildings while protecting battery health.

✅ Uses idle EVs to power buildings and support renewables

✅ Smart algorithms minimize lithium-ion battery degradation

✅ Provides grid services, demand response, and peak shaving

 

Stored energy from electric vehicles (EVs) can be used to power large buildings -- creating new possibilities for the future of smart, renewable energy -- thanks to ground-breaking battery research from WMG at the University of Warwick.

Dr Kotub Uddin, with colleagues from WMG's Energy and Electrical Systems group and Jaguar Land Rover, has demonstrated that vehicle-to-grid (V2G) technology can be intelligently utilised to take enough energy from idle EV batteries to be pumped into the grid and power buildings -- without damaging the batteries.

This new research into the potentials of V2G shows that it could actually improve vehicle battery life by around ten percent over a year.

For two years, Dr Uddin's team analysed some of the world's most advanced lithium ion batteries used in commercially available EVs -- and created one of the most accurate battery degradation models existing in the public domain -- to predict battery capacity and power fade over time, under various ageing acceleration factors -- including temperature, state of charge, current and depth of discharge.

Using this validated degradation model, Dr Uddin developed a 'smart grid' algorithm, which supports grid coordination and intelligently calculates how much energy a vehicle requires to carry out daily journeys, and -- crucially -- how much energy can be taken from its battery without negatively affecting it, or even improving its longevity.

The researchers used their 'smart grid' algorithm to see if they could power WMG's International Digital Laboratory -- a large, busy building which contains a 100-seater auditorium, two electrical laboratories, teaching laboratories, meeting rooms, and houses approximately 360 staff -- with vehicle-to-building charging from EVs parked on the University of Warwick campus.

They worked out that the number of EVs parked on the campus (around 2.1% of cars, in line with the UK market share of EVs) could spare the energy to power this building, acting as capacity on wheels for electricity networks -- and that in doing so, capacity fade in participant EV batteries would be reduced by up to 9.1%, and power fade by up to 12.1% over a year.

It has previously been thought that extracting energy from EVs with V2G technology causes their lithium ion batteries to degrade more rapidly.

Dr Uddin's group (along with collaborators from Jaguar Land Rover) have proved, however, that battery degradation is more complex -- and this complexity, in operation, can be exploited to improve a battery's lifetime.

Given that battery degradation is dependent on calendar age, capacity throughput, temperature, state of charge, current and depth of discharge, V2G is an effective tool that can be used to optimise a battery's conditions such that degradation is minimised. Hence, taking excess energy from an idle EV to power the grid actually keeps the battery healthier for longer.

Dr Uddin commented on the research:

"These findings reinforce the attractiveness of vehicle-to-grid technologies to automotive Original Equipment Manufacturers: not only is vehicle-to-grid an effective solution for grid support -- and subsequently a tidy revenue stream -- but we have shown that there is a real possibility of extending the lifetime of traction batteries in tandem.

"The results are also appealing to policy makers interested in grid decarbonisation and addressing grid challenges from rising EVs across power systems."

The research, 'On the possibility of extending the lifetime of lithium-ion batteries through optimal V2G facilitated by an integrated vehicle and smart-grid system' is published in Energy.

It was funded by the Engineering and Physical Sciences Research Council and the WMG centre High Value Manufacturing Catapult, in partnership with Jaguar Land Rover.

 

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Israeli ministries order further reduction in coal use

Israel Coal Reduction accelerates the energy transition, cutting coal use in electricity production by 30% as IEC shifts to natural gas, retires Hadera units, and targets a 2030 phase-out to lower emissions.

 

Key Points

Plan to cut coal power by 30%, retire IEC units, and end coal by 2030, shifting electricity generation to natural gas.

✅ 30% immediate cut in coal use for electricity by IEC

✅ Hadera units scheduled for retirement and gas replacement by 2022

✅ Complete phase-out of coal and gasoil in power by 2030

 

Israel's Energy and Water and Environmental Protection Ministers have ordered an immediate 30% reduction in coal use for electricity production by state utility Israel Electric Corporation as the country increases its dependence on domestic natural gas.

IEC, which operates four coal power plants with a total capacity of 4,850 MW and imports thermal coal from Australia, Colombia, Russia and South Africa, has been planning, as part of the decision to reduce coal use, to shut one of its coal plants during autumn 2018, when demand is lowest.

Israel has already decided to shut the four units of the oldest coal power plant at Hadera by 2022, echoing Britain's coal-free week milestones, and replace the capacity with gas plants.

"By 2030 Israel will completely stop the use of coal and gasoil in electricity production," minister Yuval Steinmetz said.

Coal consumption peaked in 2012 at 14 million mt and has declined steadily, aligning with global trends where renewables poised to eclipse coal in power generation, with the coming on line of Israel's huge Tamar offshore gas field in 2013.

In 2015 coal accounted for more than 50% of electricity production, even as German renewables outpaced coal in generation across that market. Coal's share would decline to less than 30% under the latest decision.

Israel's coal consumption in 2016 totaled 8.7 million mt, as India rationed coal supplies amid surging demand, and was due to decline to 8 million mt last year.

Three years ago, the ministers ordered a 15% reduction in coal use, while Germany's coal generation share remained significant, and the following year a further 5% cut was added.

 

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Wynne defends 25% hydro rate cut:

Ontario Hydro Rate Cuts address soaring electricity prices, lowering hydro bills via refinancing, FAO-reviewed costs, and long-term infrastructure investment, balancing ratepayer relief with a projected $21 billion net expense over 30 years.

 

Key Points

Ontario electricity bill relief spreading infrastructure and green energy costs over 30 years via refinancing.

✅ 25% average bill cut; $156 to $123 per month

✅ FAO projects $21B net cost over 30 years

✅ Costs shifted to long-term debt, infrastructure, green energy

 

Premier Kathleen Wynne is making no apologies for the Liberals’ 25 per cent hydro rate cuts, legislation to lower electricity rates that a legislative watchdog warns will cost at least $21 billion over three decades.

In the wake of Financial Accountability Officer Stephen LeClair’s report on the “Fair Hydro Plan,” Wynne emphasized that Ontario electricity consumers demanded and deserved relief.

“You all read the newspaper, you listen to the radio and you watch television — you know the problems that families are having around the province paying for their electricity costs,” the premier told reporters Thursday in Timmins.

That’s why the government moved forward with a rate cut, with recent Hydro One reconnections underscoring the stakes, that will see the average household’s monthly hydro bill drop from $156 to $123 once it fully takes effect next month.

In a 15-page report released Wednesday, the financial accountability officer estimated the initiative would cost the province $45 billion over the next 29 years amid a cabinet warning on prices that electricity costs could soar, while saving ratepayers $24 billion for a next expense of $21 billion.

Both the Progressive Conservatives and the New Democrats oppose the Liberal rate cut, arguing that a deal with Quebec would not lower hydro bills.

But Wynne said the government has in effect renegotiated a mortgage so it will bankroll hydro infrastructure improvements over a longer time period, though some have urged the next government to scrap the Fair Hydro Plan and review options, in order to give customers a break now.

“We’re talking about a 30-year window here. It took at least 30 years, probably 40 years, to let the electricity system degrade to the stage that it had in 2003,” she said, noting “we were having blackouts and brownouts around the province” before her party took office that year.

“There were thousands of kilometres of line that needed to be rebuilt . . . that work hadn’t been done over those generations, so electricity costs were low over that period of time but the work wasn’t being done.”

When her predecessor Dalton McGuinty came to power in 2003, Wynne said Queen’s Park began spending billions on infrastructure improvements, including expensive subsidies for green energy, such as wind turbines and solar panels.

“There’s a lot of work that has been done since then. Literally thousands of kilometres of line have been rebuilt. The coal-fired plants have been shut down. The air is cleaner. There’s less pollution in the air. The system is reliable and renewable,” she said.

“So there’s a cost associated with that and what was happening was that was work that had to be done — and all of those costs were on the shoulders of people today.”

Wynne noted “this electricity grid is an asset that is going to be used for generations to come.”

“My grandchildren are going to benefit from this asset, so I think it’s fair that we spread the cost of that over that 30-year period,” she said.

“That’s how we made this decision.”

 

 

 

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Russia Develops Cyber Weapon That Can Disrupt Power Grids

CrashOverride malware is a Russian-linked ICS cyberweapon targeting power grids, SCADA systems, and utility networks; linked to Electrum/Sandworm, it threatens U.S. transmission and distribution with modular attacks and time-bomb payloads across critical infrastructure.

 

Key Points

A modular ICS malware linked to Russian actors that disrupts power grids via SCADA abuse and forced breaker outages.

✅ Targets breakers and substation devices to sustain outages

✅ Modular payloads adapt to ICS protocols and vendors

✅ Enables timed, multi-site attacks against transmission and distribution

 

Hackers allied with the Russian government have devised a cyberweapon that has the potential to be the most disruptive yet against electric systems that Americans depend on for daily life, according to U.S. researchers.

The malware, which researchers have dubbed CrashOverride, is known to have disrupted only one energy system — in Ukraine in December. In that incident, the hackers briefly shut down one-fifth of the electric power generated in Kiev.

But with modifications, it could be deployed against U.S. electric transmission and distribution systems to devastating effect, said Sergio Caltagirone, director of threat intelligence for Dragos, a cybersecurity firm that studied the malware and issued a recent report.

And Russian government hackers have shown their interest in targeting U.S. energy and other utility systems, with reports of suspected breaches at U.S. power plants in recent years, researchers said.

“It’s the culmination of over a decade of theory and attack scenarios,” Caltagirone warned. “It’s a game changer.”

The revelation comes as the U.S. government is investigating a wide-ranging, ambitious effort by the Russian government last year to disrupt the U.S. presidential election and influence its outcome, and has issued a condemnation of Russian power grid hacking as well. That campaign employed a variety of methods, including hacking hundreds of political and other organizations, and leveraging social media, U.S. officials said.

Dragos has named the group that created the new malware Electrum, and it has determined with high confidence that Electrum used the same computer systems as the hackers who attacked the Ukraine electric grid in 2015. That attack, which left 225,000 customers without power, was carried out by Russian government hackers, other U.S. researchers concluded. U.S. government officials have not officially attributed that attack to the Russian government, but some privately say they concur with the private-sector analysis.

“The same Russian group that targeted U.S. [industrial control] systems in 2014, including the Dragonfly campaign documented by Symantec, turned out the lights in Ukraine in 2015,” said John Hultquist, who analyzed both incidents while at iSight Partners, a cyber-intelligence firm now owned by FireEye, where he is director of intelligence analysis. Hultquist’s team had dubbed the group Sandworm.

“We believe that Sandworm is tied in some way to the Russian government — whether they’re contractors or actual government officials, we’re not sure,” he said. “We believe they are linked to the security services.”

Sandworm and Electrum may be the same group or two separate groups working within the same organization, but the forensic evidence shows they are related, said Robert M. Lee, chief executive of Dragos.

The Department of Homeland Security, which works with the owners of the nation’s critical infrastructure systems, did not respond to a request for comment Sunday.

Energy-sector experts said that the new malware is cause for concern, but that the industry is seeking to develop ways to disrupt attackers who breach their systems, including documented access to U.S. utility control rooms in prior incidents.

“U.S. utilities have been enhancing their cybersecurity, but attacker tools like this one pose a very real risk to reliable operation of power systems,” said Michael J. Assante, who worked at Idaho National Labs and is a former chief security officer of the North American Electric Reliability Corporation, where he oversaw the rollout of industry cybersecurity standards.

CrashOverride is only the second instance of malware specifically tailored to disrupt or destroy industrial control systems. Stuxnet, the worm created by the United States and Israel to disrupt Iran’s nuclear capability, was an advanced military-grade weapon designed to affect centrifuges that enrich uranium.

In 2015, the Russians used malware to gain access to the power supply network in western Ukraine, but it was hackers at the keyboards who remotely manipulated the control systems to cause the blackout — not the malware itself, Hultquist said.

With CrashOverride, “what is particularly alarming . . . is that it is all part of a larger framework,” said Dan Gunter, a senior threat hunter for Dragos.

The malware is like a Swiss Army knife, where you flip open the tool you need and where different tools can be added to achieve different effects, Gunter said.

Theoretically, the malware can be modified to attack different types of industrial control systems, such as water and gas. However, the adversary has not demonstrated that level of sophistication, Lee said.

Still, the attackers probably had experts and resources available not only to develop the framework but also to test it, Gunter said. “This speaks to a larger effort often associated with nation-state or highly funded team operations.”

One of the most insidious tools in CrashOverride manipulates the settings on electric power control systems. It scans for critical components that operate circuit breakers and opens the circuit breakers, which stops the flow of electricity. It continues to keep them open even if a grid operator tries to close them, creating a sustained power outage.

The malware also has a “wiper” component that erases the software on the computer system that controls the circuit breakers, forcing the grid operator to revert to manual operations, which means driving to the substation to restore power.

With this malware, the attacker can target multiple locations with a “time bomb” functionality and set the malware to trigger simultaneously, Lee said. That could create outages in different areas at the same time.

The outages would last a few hours and probably not more than a couple of days, Lee said. That is because the U.S. electric industry has trained its operators to handle disruptions caused by large storms, alongside a renewed focus on protecting the grid in response to recent alerts. “They’re used to having to restore power with manual operations,” he said.

So although the malware is “a significant leap forward in tradecraft, it’s also not a doomsday scenario,” he said.

The malware samples were first obtained by ESET, a Slovakian research firm, which shared some of them with Dragos. ESET has dubbed the malware Industroyer.

 

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Clean energy's dirty secret

Renewable Energy Market Reform aligns solar and wind with modern grid pricing, tackling intermittency via batteries and demand response, stabilizing wholesale power prices, and enabling capacity markets to finance flexible supply for deep decarbonization.

 

Key Points

A market overhaul that integrates variable renewables, funds flexibility, and stabilizes grids as solar and wind grow.

✅ Dynamic pricing rewards flexibility and demand response

✅ Capacity markets finance reliability during intermittency

✅ Smart grids, storage, HV lines balance variable supply

 

ALMOST 150 years after photovoltaic cells and wind turbines were invented, they still generate only 7% of the world’s electricity. Yet something remarkable is happening. From being peripheral to the energy system just over a decade ago, they are now growing faster than any other energy source and their falling costs are making them competitive with fossil fuels. BP, an oil firm, expects renewables to account for half of the growth in global energy supply over the next 20 years. It is no longer far-fetched to think that the world is entering an era of clean, unlimited and cheap, abundant electricity for all. About time, too. 

There is a $20trn hitch, though. To get from here to there requires huge amounts of investment over the next few decades, to replace old smog-belching power plants and to upgrade the pylons and wires that bring electricity to consumers. Normally investors like putting their money into electricity because it offers reliable returns. Yet green energy has a dirty secret. The more it is deployed, the more it lowers the price of power from any source. That makes it hard to manage the transition to a carbon-free future, during which many generating technologies, clean and dirty, need to remain profitable if the lights are to stay on. Unless the market is fixed, subsidies to the industry will only grow.

Policymakers are already seeing this inconvenient truth as a reason to put the brakes on renewable energy. In parts of Europe and China, investment in renewables is slowing as subsidies are cut back, even as Europe’s electricity demand continues to rise. However, the solution is not less wind and solar. It is to rethink how the world prices clean energy in order to make better use of it.

 

Shock to the system

At its heart, the problem is that government-supported renewable energy has been imposed on a market designed in a different era. For much of the 20th century, electricity was made and moved by vertically integrated, state-controlled monopolies. From the 1980s onwards, many of these were broken up, privatised and liberalised, so that market forces could determine where best to invest. Today only about 6% of electricity users get their power from monopolies. Yet everywhere the pressure to decarbonise power supply has brought the state creeping back into markets. This is disruptive for three reasons. The first is the subsidy system itself. The other two are inherent to the nature of wind and solar: their intermittency and their very low running costs. All three help explain why power prices are low and public subsidies are addictive.

First, the splurge of public subsidy, of about $800bn since 2008, has distorted the market. It came about for noble reasons—to counter climate change and prime the pump for new, costly technologies, including wind turbines and solar panels. But subsidies hit just as electricity consumption in the rich world was stagnating because of growing energy efficiency and the financial crisis. The result was a glut of power-generating capacity that has slashed the revenues utilities earn from wholesale power markets and hence deterred investment.

Second, green power is intermittent. The vagaries of wind and sun—especially in countries without favourable weather—mean that turbines and solar panels generate electricity only part of the time. To keep power flowing, the system relies on conventional power plants, such as coal, gas or nuclear, to kick in when renewables falter. But because they are idle for long periods, they find it harder to attract private investors. So, to keep the lights on, they require public funds.

Everyone is affected by a third factor: renewable energy has negligible or zero marginal running costs—because the wind and the sun are free. In a market that prefers energy produced at the lowest short-term cost, wind and solar take business from providers that are more expensive to run, such as coal plants, depressing wholesale electricity prices, and hence revenues for all.

 

Get smart

The higher the penetration of renewables, the worse these problems get—especially in saturated markets. In Europe, which was first to feel the effects, utilities have suffered a “lost decade” of falling returns, stranded assets and corporate disruption. Last year, Germany’s two biggest electricity providers, E.ON and RWE, both split in two. In renewable-rich parts of America, power providers struggle to find investors for new plants, reflecting U.S. grid challenges that slow a full transition. Places with an abundance of wind, such as China, are curtailing wind farms to keep coal plants in business.

The corollary is that the electricity system is being re-regulated as investment goes chiefly to areas that benefit from public support. Paradoxically, that means the more states support renewables, the more they pay for conventional power plants, too, using “capacity payments” to alleviate intermittency. In effect, politicians rather than markets are once again deciding how to avoid blackouts. They often make mistakes: Germany’s support for cheap, dirty lignite caused emissions to rise, notwithstanding huge subsidies for renewables. Without a new approach the renewables revolution will stall.

The good news is that new technology can help fix the problem.  Digitalisation, smart meters and batteries are enabling companies and households to smooth out their demand—by doing some energy-intensive work at night, for example. This helps to cope with intermittent supply. Small, modular power plants, which are easy to flex up or down, are becoming more popular, as are high-voltage grids that can move excess power around the network more efficiently, aligning with common goals for electricity networks worldwide.

The bigger task is to redesign power markets to reflect the new need for flexible supply and demand. They should adjust prices more frequently, to reflect the fluctuations of the weather. At times of extreme scarcity, a high fixed price could kick in to prevent blackouts. Markets should reward those willing to use less electricity to balance the grid, just as they reward those who generate more of it. Bills could be structured to be higher or lower depending how strongly a customer wanted guaranteed power all the time—a bit like an insurance policy. In short, policymakers should be clear they have a problem and that the cause is not renewable energy, but the out-of-date system of electricity pricing. Then they should fix it.

 

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