Electricity Rates May Go Up Soon Due to New EPA Regulations

Last week, the U.S. Environmental Protection Agency (EPA) issued its plan for establishing new greenhouse gas (GHG) pollution standards. EPA Administrator Lisa Jackson said: “We are following through on our commitment to proceed in a measured and careful way to reduce GHG pollution that threatens the health and welfare of Americans, and contributes to climate change.”

Here is a little history. Last summer, the US House of Representatives narrowly passed the 1,000+ page American Clean Energy and Security Act of 2009, called the Cap-and-Trade bill. This bill particularly mandates a 17% cut in greenhouse gas emissions by 2020, puts a price on carbon dioxide emissions, requires that at least 20% of electricity comes from renewable sources, and mandates increased energy efficiency.

Basically, the government tried to "cap" the amount of carbon dioxide (CO2) and other so-called "greenhouse gases" that can be emitted nationally. Companies that emit such gases would be issued emission permits and would have to pay for these allowances every year. This of course would cause energy prices to rise, since the utilities and other companies would have to pay for emission permits and at the same time spend large amounts of money to change their technology. Does anyone have any doubts these extra costs will be passed on to the consumers? Luckily for us, the consumers, the Cap-and-Trade bill stalled in Senate. So now, having failed to impose their plan via Congress, the administration is moving unilaterally to develop new standards over the next year.
Note that CO2 is not declared a pollutant or health threat in itself, because it is not. Rather, its increase is said to have an insulating effect in the atmosphere and cause global warming. Most climate scientists support such a notion, although there are those who are skeptical about it. For example, Professor of Meteorology at the Massachusetts Institute of Technology Richard S. Lindzen asserts in his article titled "Global Warming: The Origin and Nature of the Alleged Scientific Consensus", “there is no substantive basis for predictions of sizable global warming due to observed increases in minor greenhouse gases such as carbon dioxide, methane, and chlorofluorocarbons”.

Of course, fossil fuels are finite. So, regardless of the scientific dispute on global warming, eventually we will have to switch entirely to renewable energy sources. However, the electricity production from renewable sources costs significantly more than that of coal and natural gas. For example, utility-scale solar electricity costs about four times more than coal-based electricity (see cost comparison of energy sources). To become cost-competitive, photovoltaic technology should become four times more efficient, which is theoretically impossible (see solar cell efficiency limits), or drop in price four-fold, which is unrealistic. Given this fact, the transition to alternative energy should be gradual and should not rapidly hit the economy and the consumers. Especially now, when the country is broke with a multi-trillion dollar debt, it’s not the right time to burden it with politically motivated regulations.

Recession, Jobs, and Business Ethics

There used to be a saying: to launch a power supply company you need to have a two-car garage and one car. This is sort of how Todd Products, where I have worked for 11 years, was launched. Paul Todd himself was an engineer and an inventor. It was really nice to work for a company where a president could walk into your cubical and discuss the electronic circuits with you. As an engineer himself he understood that experienced engineers are holders of important expertise and are not commodity-- you get a drop in business, you lay them off; you get more business, you hire some more. Another example of engineer-entrepreneur for whom I had an opportunity to work is Richard Blake -- the founder of Transistors Devices. I feel it is always refreshing to work for a company whose owner could argue about the circuits and not just financial reports. In general, in the past, companies used to be owned by someone -- an entrepreneur, an inventor, an engineer, etc. -- who devoted his/her life to the company and cared about its long term growth. Now most of the companies are owned by shareholders, which means by everyone and by nobody. They are controlled by a board of directors who seem to care only about the bottom line, and who begin what they call “downsizing” as soon as they see a drop in business.

Last week’s issue of The Jewish Press featured an article, “The Media's Madoff Moment” by A.H. Foxman. It describes a story about a 1995 fire in a textile plant, Malden Mills, that employed 2,400 people. The fire destroyed three of the four factory buildings and caused $500 million in damage. Two days later Aaron Feuerstein, an Orthodox Jew who owned the company and who followed Biblical values in his business, announced that all his employees will be paid their full salaries. He also gave $80,000 in gifts to charitable organizations, as he did every holiday season. Feuerstein ended up paying full wages to his idle employees for up to four months while the plant was rebuilt. Whatever became nowadays of business owners with a human face? I was lucky to keep my job during the recession, but during the worst of it, unemployment rates of all engineers exceeded 5% and overall jobless rates were 10%. If the companies who have cash in a bank or enough assets to get loans tried to keep their employees in spite of the losses and let them do some R&D for example, they might wind up getting out of recession sooner and stronger. The people who keep getting their paychecks would keep buying things, which would stimulate the manufacturing and job growth better than unnatural injections in the form of the government’s “stimulus plans.” And the old employees who know your business would contribute more effectively than new ones who need to go through a learning curve.

Power Supply Efficiency and Power Factor: Regulations Update

The U.S. Environmental Protection Agency (EPA) has recently announced that effective December 31, 2010, external adapters will no longer be eligible for the Energy Star label. The main reason for this move is in 2008 a mandatory federal minimum efficiency standard went into effect for adapters, mandating basically the same Energy Star performance level.

Last month the ENERGY STAR also published its Draft 3 revision to the proposed criteria for LED lamps, which can be screw into standard lamp sockets to replace incandescent bulbs. To earn the ENERGY STAR logo the LED lamp should have power factor ≥ 0.70. Of course, Energy Star is a voluntary program. However, chances are their requirements will be eventually incorporated in a federal standard. Also, Europe already requires lighting PF>0.9. These developments will certainly cause LED lamps manufacturers to use active power factor correction (PFC) circuits for LED drive. Given the efficiency and size requirements, it's likely that the SMPS designers would also have to use other techniques such as bridgeless PFC rectifiers and synchronous rectification.