Pounding the nail of CO2 reduction
with renewable portfolio standards
by Allen Best
Located 200 miles and two mountain passes northwest of Denver, the town of Craig was rocking and rolling in the late 1970s as two coal-fired power plants were being completed and a third was launched. Then, after the construction crews left, not so much.
But it could get worse. “We’re at wit’s end,” said Frank Moe, testifying against Senate Bill 252 recently before a legislative committee. The bill, which was adopted last week by the legislature, mandates that the 22 electrical cooperatives in Colorado get 20 percent of their energy from renewable sources by 2020. The existing mandate is 10 percent. The administration of Gov. John Hickenlooper testified in support.
Moe and his wife, Kerry, own and operate a Best Western in Craig. They estimate that 60 percent of their business comes from the energy sector, almost exclusively fossil fuels. “If (electrical) prices increase, I’m going to have to let somebody go,” said Kerry, tears welling in her eyes.
Whether electricity costs in Craig will rise because of this legislation, as the Moes fear, is doubtful. Yampa Valley Electric, the local cooperative, and Grand Valley Power, serving the Grand Junction area, both get their power from Xcel, which is briskly moving to meet its 30 percent mandate. Holy Cross Energy, a cooperative based in Glenwood Springs, expects to meet its internal goal of 20 percent greenhouse gas reduction by 2020.
The legislation targets the 18 cooperatives supplied by Westminster-based Tri-State Generation and Transmission, and another cooperative, Intermountain Rural Electric Association (IREA). Tri-State is the majority owner of the three coal-fired power plants in Craig, as well as a smaller plant at Nucla, west of Telluride. IREA serves territory from Fairplay to Castle Rock to Bennett.
Serving rural America
I have a soft spot for cooperatives. The result of New Deal legislation in the 1930s, they used federal financing to deliver electricity to areas where the private sector, such as Xcel’s precursor, would not go, to the scattered farms and ranches. My grandparents were charter members of their co-ops in the South Platte Valley, in 1942 and 1948. My aunt, on her 80th birthday, was asked about the greatest change in her lifetime. Electricity, she said. Not TV, not computers, but what enabled both.
Tri-State arrived in the 1950s, created by member co-ops to facilitate transmission of electricity from the giant dams of the West then being built. In keeping with the times, Tri-State then focused on centralized power production, mostly coal plants.
At the six-hour hearing I attended, proponents portrayed SB 252 as a job creator for rural Colorado and a strong hedge against rising costs of coal-fired power. A little more costly up front, renewables will deliver significant cost savings over the long term, predicted Jeff Berman, an elected director of Durango-based La Plata Electric.
“Too much, too fast, too costly,” opponents said repeatedly. SB 252 would be a job killer, they predicted.
Republican legislators on the committee kept asking why, if renewable energy was such a good idea, the private sector wasn’t already doing it. Too bad they weren’t around in the 1930s to ask the same question. One even tried to link the mandate to Solyndra, the California solar manufacturer that flopped and reneged on $500 million in government loans.
To meet this mandate, said Ken Anderson, chief executive of Tri-State, his organization would most likely go to Wyoming and Nebraska, where wind resources are better and hence cheaper. Absent from this hearing was mention of the problem: carbon dioxide. Instead, arguments were waged in proxies about jobs gained, jobs lost.
Unseen, but not inconsequential
This unseen gas produced by burning fossil fuels probably represents a grave, long-term risk to stability of modern civilizations. “We risk the chance of being the first generation to leave a problem for which there is no solution,” Hickenlooper used to say when he was mayor.
But Frank Moe — and I suspect many opponents of the mandate — see the world very differently. He observed that before leaving Craig that morning, the sky had been crystal clear. Denver, upon his arrival, not so much. If you think that carbon dioxide isn’t a problem, these renewable energy mandates must surely seem strange, even sinister.
A painful split was also apparent between rural and urban Colorado. “This is an insult to rural Colorado,” said one speaker. Tri-State and its supporters say they were not consulted about the bill in its formation — and indeed, didn’t know about it until it was introduced. Lee Boughey, Tri-State spokesman, calls it a “rushed, exclusionary legislative process. We would like to have had a more engaged discussion,” he says.
Claims on both sides were exaggerated. While opponents talked of 20 percent rate increases, SB 225 specifies a very strong backstop: a maximum 2 percent increase. Coal power, however, enjoys no such limits. But will this create jobs for rural Colorado? On the margins of this bill, but intriguing in its potential, is a carve-out for something called distributed generation, producing power close to where it is consumed, whether from methane produced at dairy farms or other, small sources.
More likely, big wind will provide the biggest answer. Wind industry representatives say abundant wind remains in Colorado to be developed. Transmission is lacking. Tri-State says it takes 7 to 10 years to develop transmission lines, and sometimes longer. But transmission has happened more rapidly. A 70-mile transmission line in northeastern Colorado was permitted and built within 12 months. And that was done without use of eminent domain, says Brent Orr of Cornerstone Energy Development. Utilities, he says, must acknowledge impacts to farmers and ranchers and compensate accordingly.
Windy places, not just windy oratory
Southeastern Colorado was site of the state’s first big wind farm, Colorado Green, and there’s more where that wind comes from. “If it’s not blowing, people fall over,” he says. More remains, says Jay D. Suhler, a banker in Springfield and formerly the town’s mayor for 23 years. Turbines owned by the Arkansas River Power Authority ran at 44 percent capacity last year. He contends that state government needs to provide more leadership to ensure construction of transmission lines.
Tri-State continues to invest in coal. Since 2005, it has put $71.9 million into a proposed coal plant in Holcomb, Kan., and more into land and water for a potential coal, nuclear or some other kind of power generation near Lamar. In 2011, Tri-State’s Ken Anderson made the case for continuing to ride coal — although he didn’t say what is needed. Anderson has invested a relatively small amount of money into researching carbon sequestration at his company’s Craig plants.
Tri-State and its co-ops seem more focused on resisting change that nurturing innovation. You have to wonder why. In Craig, Nucla, and other towns, coal plants provide middle-class incomes where good jobs are scarce. But clearly, these coal plants cannot be allowed to continue polluting the atmosphere with greenhouse gases.
But renewable portfolio standards are annoying, too, in that they anoint technological correctness. SB 252 gives Tri-State no credit for the 15 percent of its electricity that comes from a renewable, non-carbon polluting source, hydroelectric dams. Del Worley, general manger of Holy Cross Electric, which has no dog in this fight, questions whether this is fair. I agree. President Barack Obama had it right two years ago in calling for a clean energy standard. Carbon dioxide, not fossil fuels, should be off the table.
A new book, “The Carbon Crunch: How We’re Getting Climate Change Wrong — and How to Fix It, ” by Oxford economist Dieter Helm, argues for a carbon tax, both domestically and on imported goods, to create a level global playing field and drive innovation in energy production and consumption.
But we’re not having that more sophisticated conversation at the national level, so we end up with proxy arguments about job gains and losses in statehouse meeting rooms. SB 225 has good intentions, although it strikes me as a bit like using rocks to pound nails.
A slightly shorter version of this originally appeared in the May 5, 2013, issue of The Denver Post.