Joseph Krist
Publisher
We are finally approaching the finish line of the election. The MCN mothership resides in one of the most contested races for House of Representatives. The volume of mail has been astonishing. And everything you hear about how nasty some of this stuff can be is true. But now that we’re here – there’s only one thing left to do. Vote. Please. Don’t boo. Vote. That goes for either side. T-shirts, lawn signs, all of that does not matter if you don’t vote.
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WESTERN WATER
A federal district court judge ruled that the U.S. Army Corps of Engineers violated the National Environmental Protection Act and the Clean Water Act when it approved expanding a Colorado reservoir. The Gross Reservoir supplies 1.5 million people in the Denver metropolitan area. The Denver water utility has been seeking to expand the reservoir for some twenty years to deal with the ongoing growth in Colorado.
Work on the expansion of the existing dam began in 2022 despite the legal challenge. The project will add 131 feet to the reservoir’s 340-foot dam, allowing it to triple its water storage capacity and hold an additional 72,000 acre-feet of water diverted from the declining Colorado River beginning 2027. The decision cites the fact that the project could result in a “compact call” by the Lower Basin states (CA, NV, AZ). That would force the Upper Basin states (WY, CO, UT, MN) to release more water to satisfy the compact’s requirements.
The Upper Basin does not yet use all of the water it is technically entitled to, as the region doesn’t have large reservoirs as is the case with Lake Mead or Powell. It is still entitled to use an additional 3 million acre feet of water. Denver seeks to use water rights it acquired in 1945 to provide the additional water to the Gross reservoir. Colorado water law provides for water providers to receive a conditional water right from the state’s water court, which allows them to potentially develop that supply in the future.
The court’s decision does not force Denver Water to stop construction, but orders the utility to meet with plaintiffs to agree on remedies for the project’s environmental impacts and notes that the groups have a right to relief from any damage caused by the construction. It’s not going to stop the dam expansion. It will possibly see Denver Water spend half a billion dollars on a project that will never be fully utilized. That will be on the ratepayers.
PORTS AND ELECTRIFICATION
This week it was announced that the US E.P.A. would award some $3 billion of grants to accelerate the electrification of vehicles at ports throughout the country. In many areas, ports have become associated with pollution from the ships themselves but primarily from the vehicles which serve the port. That includes not just the diesel trucks coming and going from the ports but much of the equipment used in the Port facilities themselves.
Two ports caught our attention. The Ports of L.A. and Long Beach were the recipients of some $412 million. This will be combined with some $225 million of funding from the Ports and the shippers. The Ports have been at the center of efforts to reduce the levels of air pollution around the Ports. The high volumes handled lead to significant truck traffic. The volume of trucks and sometimes long waits by those vehicles contributes to poor air quality.
The second is the Port of Baltimore. As part of the program, the Port will receive $147 million under the program. The collapse of the Key Bridge in March highlighted the important role the Port of Baltimore plays in the export market. The grant was announced in the wake of the settlement of claims against the operator of the freighter which crashed into the bridge. That settlement will provide $102 million towards the cost of cleaning up the debris from the bridge.
Overall, the program will provide grants to 55 ports in 27 states and territories. Ports receiving money include the Port Authority of New York and New Jersey, the Detroit-Wayne County Port Authority, the ports of Savannah and Brunswick, Georgia, as well as Philadelphia, Los Angeles and Oakland, California.
TRI STATE GENERATION
Tri State Generation has been at the center of the effort to address climate change. Its coal based generation fleet has led participating distribution coops it serves to seek out renewable power. It has been in response to customer sentiment. A few of these coops have executed agreements to withdraw from Tri State, requiring contributions from departing utilities. Those coops are replacing capacity with renewables. It has put Tri State under enormous pressure.
Now, the federal government is throwing Tri State a lifeline. The EPA is awarding $2.5 billion in federal loans and grants to retire existing coal plants and acquire new renewable energy resources across four Western states where its member cooperatives provide electricity to a million consumers. It will also fund Tri-State’s purchase of 1,280 megawatts of energy from solar, wind and wind/storage hybrid projects and more than 100 megawatts of standalone energy projects, about half of which will be located in Colorado.
The financing comes from the Department of Agriculture’s $9.7 billion Empowering Rural America (ERA) program for electric cooperatives only, helping co-ops in 23 states transition to green energy. A total of $1.1 billion of ERA money has been announced for Colorado. Tri-State received the largest allocation at $679 million. United Power, the second-largest co-op in the state which left Tri State, received up to $261 million. CORE Electric Cooperative, the state’s largest co-op, is set to get $225 million.
TEXAS POWER RULING
A U.S. district court ruled that a Texas law giving incumbent utilities the sole right to build transmission lines connecting to their systems was “invalid” because it violates the U.S. Constitution. Texas utility codes related to the transmission law “are unconstitutional because they violate the dormant Commerce Clause and are therefore invalid and unenforceable, to the extent they grant in-state transmission owners the exclusive right to build or acquire transmission lines in the non-[Electric Reliability Council of Texas] regions of Texas,” the district court said. The dormant Commerce Clause bars states from restricting interstate commerce.
In August 2022, the U.S. Court of Appeals for the Fifth Circuit found that the Texas transmission law likely violates the Commerce Clause. The Texas law was particularly restrictive because it prevented both regional transmission organization-planned and merchant projects. It comes after a few years of significant issues with the transmission of power in Texas. In one of those instances, El Paso which has access to power outside the Texas transmission system was able to continue to provide service when other utilities could not.
CHICAGO BUDGET
Chicago Mayor Brandon Johnson proposed a 4% increase in property tax bills for homeowners in the city as part of his plan to cover current and 2025 budget gaps. It is designed to generate $300 million in new tax revenues, although that could change based on property assessments for 2024. The tax increase proposal comes in the wake of the Mayor’s campaign pledges (last year) of no increases. His proposal includes no cuts in the City’s workforce.
Johnson’s proposed budget includes plans to use tax increment financing money for Chicago Public Schools, $52 million for youth opportunity programs, $40 million for an initiative to address the city’s homeless and migrant situation, and $39 million for a small business support program. Johnson noted that he plans to uphold the city’s pension obligations. The city’s projected budget deficit for FY 2024 is some $222.9 million, which is below previous estimates from earlier in the fiscal year. With the expiration of COVID assistance and other factors considered, the budget deficit for FY 2025 is estimated to be $982.4 million, according to city Budget Director’s office.
CHICAGO SCHOOLS ON THE BALLOT
On Election Day, voters will have their first chance in many years to elect 10 school board members, after the Chicago Teachers Union lobbied for years to end mayoral control of the school system. Enrollment numbers have ticked up in Chicago and other cities over the past two years, but still remain well below prepandemic levels. The resulting aid reductions tied to per pupil attendance have occurred at the same time spending on the schools increased.
We often criticize ideological approaches that involve finances and credits that usually come from red states. In this case, the nation’s most militant teachers union is working with the Mayor to limit changes to the school system. We do not argue here that historic funding for inner city schools was not equitable. It was not and still is not. The idea of having a neighborhood based school system is a valid goal.
But an example illustrates, in a time of clearly limited resources the goals have to be practical. Frederick Douglass Academy High School is on the city’s West Side. At its peak, it served more than 500 students in 2007. In the era after the Great Recession, demographic trends were negative in many cities and Chicago was no exception. In the case of the school, local trends have left the school with only 34 enrolled students.
Closing the school and getting the children to a fully staffed functioning school would seem to make sense. Under the union’s plans, these underutilized schools should be fully staffed even in the face of declining enrollments and a continuing nationwide teacher shortage. At the core of the current situation is a disagreement between the Mayor and the CEO of CPS.
The Mayor wants CPS to borrow to fund pension payment requirements. The CEO for CPS wants the City to apply new revenues generated by tax increment financing districts to covering some of the schools’ costs. Some Aldermen are advocating lessening pension funding contributions in lieu of a general property tax increase. There are still opportunities for a reasonable plan to be adopted but the politics of the situation don’t lend themselves to prudent judgments on credit issues.
ELECTION DAY
Several items on ballots across the country have drawn our attention. There are several initiatives to raise or establish taxes to support transportation. In Nashville, another effort is underway to develop and fund a comprehensive transportation system for this ambitious city. It comes after previous efforts to get voter approval for large scale projects failed. This time there is a much different backdrop to the effort to increase sales taxes than was the case in 2018 when a project including light rail was proposed.
Four states have cannabis on the ballot. Florida has an established medical marijuana scheme and now voters will be asked to approve legal recreational marijuana. Adults 21 years old and older would be allowed to purchase marijuana from licensed dispensaries. Florida also has a contentious ballot item regarding reproductive rights. Voters in Nebraska will have a vote on two initiatives which would legalize and regulate the use of medical marijuana in the state. Like Florida, Nebraska actually has two reproductive rights initiatives on its ballot.
North Dakota voters will have their third chance to legalize recreational marijuana. Efforts in 2018 and 2022 failed. South Dakota voters already voted in favor of legalization in 2020 but the head of the state police challenged the initiative in court. The South Dakota Supreme Court ultimately ruled against the measure. The current initiative was drawn up in the light of those concerns. The ballot also includes a proposed constitutional amendment regarding abortion rights.
AUTONOMOUS VEHICLES
This year, five states and Washington, D.C., enacted bills dealing with fully automated vehicles. The new laws in Alabama, Kentucky and South Dakota allow for the operation of fully autonomous vehicles. California’s new law requires manufacturers to continuously monitor every autonomous vehicle on the road and designate a remote human operator to immobilize a vehicle if necessary. The law also allows law enforcement to issue a notice of noncompliance when autonomous vehicles violate local traffic ordinances. California’s new law requires $5 million in insurance for manufacturers testing autonomous vehicles on state roads.
North Carolina’s brings the vehicles under updated dealer regulations for all cars. The new law in Kentucky for fully autonomous vehicles requires owners to file a safety and communication plan that law enforcement can use and to have a minimum of $1 million in liability insurance per vehicle, roughly 10 times higher than the amount for regular personal vehicles. Some of that reflects the fact that much of the impetus behind the law came from the trucking side of the issue. Alabama’s new law requires a minimum of $100,000 in liability insurance for fully autonomous vehicles, about the same as ordinary cars.
COOL PAVEMENT
A little over a year ago, we wrote about a test of “cool pavement”. The technology is a coating which can be applied on asphalt which will reflect sunlight. Untreated asphalt absorbs heat. The idea was to literally cool streets off in an effort to deal with local areas of overheating – “heat islands”. Now, Arizona State University researchers have issued a report on the effectiveness of the process tested.
Pavements in the city of Phoenix that were treated with cooling technology had significantly lower surface temperatures compared with conventional pavement. That heat has to go somewhere and on its way up increases the thermal stress that a person standing on the surface would experience at midday. Like if you’re waiting for a bus or to cross a street you would be buffeted by the heat rising.
The researchers determined that cool pavement technology is most effective on large parking lots that lack shade or in car-centric cities with hot climates, low cloud cover and wide residential streets. It’s not effective in high-rise downtown areas and shouldn’t be used in areas with high pedestrian traffic like playgrounds, plazas or parks.
So, does it achieve its goal of reducing the impact on people of conditions in urban “heat islands”? Rather than rely on cool pavement to mitigate the effects of heat on pedestrians “Instead, heat exposure mitigation should focus on shading, such as trees and engineered shade, in these areas. “[Cool pavement] cannot replace the benefits of shade trees for pedestrian cooling.”
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