Renewable energy has become cheaper than coal

An article in The Guardian caught my eye yesterday, entitled “‘Coal is on the way out’: study finds fossil fuel now pricier than solar or wind.” This is not surprising to me as the production costs of solar and wind energy have significantly dropped over time, yet it likely catches some as a big surprise. Per the article:

“Around three-quarters of US coal production is now more expensive than solar and wind energy in providing electricity to American households, according to a new study.

‘Even without major policy shift we will continue to see coal retire pretty rapidly,’ said Mike O’Boyle, the co-author of the report for Energy Innovation, a renewables analysis firm. ‘Our analysis shows that we can move a lot faster to replace coal with wind and solar. The fact that so much coal could be retired right now shows we are off the pace.'”

When all of the costs are factored in, coal is even more expensive than indicated above. For example, coal energy continues to be costly long after it is burned through ash maintenance, leakage and litigation. Yet, now production costs are largely higher for coal than renewables. As the article notes the decline of coal is passed the tipping point.

But, don’t just take the word of this article. In the first two years of the Trump Presidency, more coal plants have been closed than in the entire first four-year term of Obama’s Presidency. This would have happened anyway regardless of who was President, but I mention Trump as even someone who campaigned on keeping coal plants open cannot stave off this trend.

If that is insufficient, note there are currently more than four times the number of solar jobs than coal jobs in the US. And, the wind energy jobs are growing very quickly in the Midwest, with Texas, Iowa, North Dakota, and Minnesota among others leading the way. In an article called “Will 2019 be the year of the turbine – wind energy continues to surge in Texas” in the Caller Times, in 2017 Texas provided about 15% of its energy through wind and has and will continue to increase that percentage in 2018 and beyond.

I feel for the coal miners, but they are owed the truth and help in retraining for new jobs and some transitional financial support. In the same areas where coal is found, the wind blows and sun shines. I implore legislators to help invest in the new economy in these areas. This should have been happening all along as this trend is not new.

 

 

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Fast break

With the NCAA March Madness tipping off, let me use fast break as a way to quickly comment on news items. For non-basketball fans, a fast break is an attempt to score before the defense sets up after a possession change.

– Congressman Devin Nunes is suing two Twitter accounts for making fun of his questionable and unethical actions as a Committee chair. Unfortunately, he has brought more followers to the two sites.

– There are a number of experienced and quality candidates running for the Democrat Presidential nomination. Dems need to avoid the “circular firing squad syndrome” which attack candidates’ imperfections. My suggestion is to listen to what each has to offer.

– The US President is headed to Ohio to save face by asking in person for GM not to close two plants hastened by his tariffs and not helping when asked last year. The union leader and two Ohio Senators asked  the President to help GM retool the plants to build SUVs rather than the sedans last year. Senator Sherrod Brown noted now the President is paying attention as it makes him look bad.

– The Brexit “troubles” continue, but hopefully the EU will agree to the delay. And, Parliament needs to use the time to clearly define what Brexit means versus staying with the EU, something they have not done. This needs to be thoughtful and data-driven. I would hate to see a state leave the US based on politics only to wake up to a terrible hangover.

That is all for now. I hope your bracket for the tournament is successful. Fast breaks are fun to watch and usually the team doing more of them wins.

A few green thoughts for a green day

In honor of St. Patrick’s Day, here are a few green thoughts for the day. Green will take a few different meanings herein.

– Let’s give a big shout out to the kids around the world who went on strike from school to bring awareness to the need for more action on climate change. I am certain they will receive push back from the fossil fuel funded crowd, but these kids care about the future and present of our planet.

– Let’s give a shout out to the twenty kids suing the US Federal government for insufficient action on planning the demise of fossil fuel in response to what they already know about climate change. As this unheard of case progresses, the lead attorney told CBS’ “60 Minutes” that their information is very solid and comes from the files of the US government.

– Let’s give a shout out to Germany and places like Georgetown, TX, Greensburg, KS and Burlington, VT. Coal energy now lags renewable energy in Germany as they are on their way to eliminating coal use in twenty years. As for the three US cities, they are 100% renewable energy powered.  The CPA Mayor of Georgetown said the renewable energy model selected is more cost-effective than the fossil fuel model – so it is saving greenbacks as well.

– Let me state my being green with envy as China is investing a trillion US dollars in building trade corridors with dozens of countries around the world. This is occurring at the same time the US is retrenching from its global leadership role, leaving global multilateral agreements, denigrating allies and spending money to build a wall for an overstated problem. The symbolism is stark – China is building bridges, we want to build walls. The US is enabling an ascendant China.

– Let me close with a shout out to people with chutzpah to set forth a Green New Deal. While not perfect, it is an idea worth discussing to fashion a plan going forward.   Ignoring a problem does not constitute a plan.

Happy St. Patrick’s Day. May the road rise to meet you.

 

Rural hospitals closing at an alarming rate

Rural hospitals in trouble is not a new topic, but the significant increase in closings and risk of such is finally getting some attention. The issue for years has been the large percentage of a rural hospital’s budget that went unpaid due to patient debt and indigent care. In some hospitals, the percentage of these two items is more than 1/2 of the budget.

Per a February, 2019 article in Modern Healthcare called “Nearly a quarter of rural hospitals are on the brink of closing” by Alex Kacik: “Twenty-one percent of rural hospitals are at high risk of closing, according to Navigant’s analysis of CMS data on 2,045 rural hospitals. That equates to 430 hospitals across 43 states that employ about 150,000 people and generate about $21.2 billion in total patient revenue a year.

Hospitals are often the economic drivers of rural communities. Per capita income falls 4% and the unemployment rate rises 1.6 percentage points when a hospital closes, a related study found. Ninety-seven rural hospitals have closed since 2010, according to the University of North Carolina Cecil G. Sheps Center for Health Services Research.

They also broke the impact down by state, revealing that half of Alabama’s rural hospitals are in financial distress, the highest percentage in the country. At least 36% of the hospitals in Alaska, Arkansas, Georgia, Maine and Mississippi are in financial jeopardy.”

Most of the states in trouble chose not to expand Medicaid, but there are some who did or are now doing so. Per several studies by The Commonwealth Fund, RAND Corporation, Economic Policy Institute and George Washington University, expanding Medicaid would help patients, state economies and rural hospitals. Why? It would allow these hospitals to get paid and paid closer to the time of service reducing accounts receivables. Getting paid has an echo effect on employees and consumers.

This issue was brought home by two Republicans pleading with their party to acquiesce in states like North and South Carolina that did not expand Medicaid. GOP Governor John Kasich of Ohio, who ran for President, said Medicaid expansion is a “no brainer” and would add over $13 billion to Ohio over several years. Yet, the most dramatic plea was from Adam O’Neal, a GOP Mayor of a North Carolina town called Belhaven.

After failing to get the GOP majority in Raleigh to help save his town’s Vidant Pungo Hospital that served 20,000 people, he walked 273 miles to Washington, DC over 14 days. “You can’t let rural hospitals close across the country. People die,” O’Neal, told Modern Healthcare in 2014. Unfortunately, Vidant Pungo closed later that year (note a non-ER clinic opened in 2016).

You can add my pleas for help back then (and now). Folks, this stuff is real. I do not care if your tribe is blue, red, purple are chartreuse, hospital closings impact people’s lives and people’s livelihoods. Closings also hurt their community’s economy. My strong advice is for legislators to stop political posturing and do something. I do not care who wins or loses a political game. Stop focusing on keeping your job and do your job. You could start by expanding Medicaid, joining the other 36 states.

Sunday selections

I hope you are having a good weekend. If you are impacted by bad weather, be safe and warm. With so many things going on, I felt it best to close the weekend with a few selections.

– while there are several good candidates running for President, I am pleased Governor Jay Inslee of Washington state has thrown his hat into the ring. He has a strong record and has said battling climate change is a top priority. Thank you for your stewardship Governor.

– the US President topped off another very tumultuous week with a rambling, profane filled two hour speech. He can curse all he wants, but there is no doubt he is a worried man. And, the GOP sycophants in Congress should be as well. They have assumed Trump will stop lying and all of his past lies are known. They are wrong on both counts.

– This week saw two major sports owners have bad days. The owner of the New England Patriots was arrested for soliciting a prostitute. Across the country the owner of the San Francisco Giants was caught on camera strong-arming his wife to the ground. This kind of behavior is insulting to the civil disobedience of kneeling to the national anthem by a player who was treated poorly as a result,

– closing on a good note, we enjoyed watching the Oscars last Sunday. We had actually seen five of the eight movies nominated plus a few others which had award recipients. The Lady Gaga/ Bradley Cooper duet was fabulous, especially filmed from behind the piano. “Green Book” was excellent, as was “Black Klansman.” The former likely won as the acting was superb by the two leads, both nominated.

I know I skipped over many stories. Since I touched on some of them earlier, I focused on others. Have a great week.

What would you say?

What would you say to a US President where the stock market grew at annualized rate of 12.8% during his tenure, excluding dividends.

What would you say to a President where net new jobs were added at an annual rate of 1.4 million, with a rate of 2.6 million per annum the last four years.

What would you say to a President where the unemployment declined from 7.6% when he started to 4.8% when he left?

What would you say to a President where the US economy had 91 consecutive months of economic growth, which eventually became the second longest in US history?

What would you say to a President that saved the largest car company in the US?

You would say thank you President Obama. The economic growth has continued under the current US President, but we should not forget he was handed the keys to a pretty good economy. It should also be noted the country was in a housing caused recession when Obama got the keys.

I mention this as the current President is too busy taking credit to give a thumbs up to others. With that said, Presidents get too much credit and blame for the economy. They only provide headwinds and tailwinds.

Yet, if people want to go there, Democrats need to do a better job of marketing. Under 12 1/2 four-year GOP Presidential terms as compared to 12 four-year Democrat Presidential terms since 1921, the number of jobs created under a Democrat President dwarfs that under a GOP President, by 2 to 1. Further, the stock market results since 1901 is markedly better under Democrat Presidents.

So, the Dems can rightfully claim they are the party of jobs and economic growth. I am delighted the growth continued under Trump, but the headwinds do not look favorable. The tariffs and added debt on top of expected increases is bothersome.

Note to Democrat Senators running for President – stabilize the ACA

The following note was posted on the website for the seven Democrat Senators running for President, with a copy to select others.

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I am an Independent voter and retired, but my career included being an actuary, benefits consultant and benefits manager for a Fortune 500 company. I have shared with Senators and Congress people a few thoughts on stabilizing the ACA, something Democrats campaigned on last fall and won.

Medicare for All deserves debate, but will require a more elongated and data-driven discussion. We need to have Congress take steps to stabilize the ACA now. To do otherwise, is a disservice to Americans.

Here are my thoughts.

– the GOP sabotaged the ACA in two specific steps which increased premiums even more. They defunded 89% of the risk corridors (for initial adverse selection) driving some insurers out of the market. The other is Trump reneged on reimbursing insurers for copays/ deductibles for people making less than 2 1/2 times the poverty level. My suggestion is to pay insurers what we promised in writing and invite those who left back into the exchanges.*

– I suggest the lowering of the eligibility age for Medicare to age 62 (the age when retirees can first draw Social Security). This could be viewed as a pilot for Medicare for All. This action would lower the Medicare premium rate for all and lower the ACA exchange premiums due to the age of those leaving the ACA and joining Medicare. In other words, both the average age of Medicare and the exchanges would be lower, so the actuarial cost per person is less in both.

– Actively encourage the expansion of Medicaid in the remaining states – this will help the economies, healthcare providers and people in those markets. There are now 36 states who have done so. GOP Ohio Governor John Kasich calls Medicaid expansion a “no brainer.”

– Finally, where only one option exists in a rural county, offer a Medicare option, again as a pilot. People should have choices.

There are other changes that would help, but this needs a data-driven analysis and not whatever the GOP did in 2017, which was a horrible approach to legislation that resulted in horrible legislation. Had any of the GOP legislation passed to kill the ACA, the GOP would have lost even more seats and we would be talking about a recession coming our way.

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* Please feel free to Google these topics: “Marco Rubio and risk corridors” and Donald “Trump and ACA subsidy decision”. The former caused insurance premiums to increase more than they otherwise would have and some insurance companies left the exchanges with the US government owing them money.  The risk corridors were designed to tie insurers over until the initial adverse selection flushed out of the system.

The latter was frustrating because the subsidy helped people in need. Trump untruthfully claimed it will only affect insurer profits, but the carriers committed to the customers to do this under contract. The CBO said this action raised the deficit by $10 billion, since premium subsidies went up to pay for the increased premiums. In my home state of NC, BCBS said before the Trump decision premiums were NOT going to increase. After the decision, the premiums increased 8%.

Saying this in a more succinct way, the GOP screwed American people to win a political argument. Sadly, that is the truth, but very few people know of this. This also is an exemplar of the President’s lying affecting hard-working people. Lying is one thing, but setting policy off lying is another matter altogether.

Note, the ACA is imperfect and complex. But, it still has not been fully implemented in all the states with those who did not expand Medicaid. But, people need to be fully aware of the sabotaging of the ACA undertaken by the GOP, which I find interesting, as the ACA is largely based on a GOP idea. That is politics for you – you did it, so I must be against it.