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Wind power bills rising

It costs more to be green; regular Xcel customers will pay less as natural gas prices drop

Gargi Chakrabarty

Published December 13, 2007 at 12:05 a.m.

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Wind turbines spin at sunset at the Emick Ranch south of Lamar. The Emick Ranch wind farm, located on 11,840 acres, is the nation's fifth largest.

Photo by Ken Papaleo / The Rocky

Wind turbines spin at sunset at the Emick Ranch south of Lamar. The Emick Ranch wind farm, located on 11,840 acres, is the nation's fifth largest.

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Xcel's voluntary wind power customers in Colorado will be hit with higher bills beginning next year.

But regular customers will benefit from lower electric bills, according to Xcel filings with regulators late Tuesday.

The utility says fully subscribed customers of WindSource will have to pay higher premiums - about $13 more per month compared with regular customers - because they aren't benefiting from declining natural gas prices enjoyed by regular customers. Fully subscribed customers get all their electricity from wind power.

Also, savings from wind power seen in past years, when wind farms were replacing old and costly natural gas-fired power plants, are declining as wind farms are replacing newer and more efficient power plants.

“Initially, wind was replacing the most inefficient natural gas plants, but as we go along and add more wind further down the line, we replace power from more efficient natural gas plants or possibly less-efficient coal plants,” said Xcel pricing consultant Dan Ahrens. “So, the economic benefits get eaten up”

The new rates, if approved by the Colorado Public Utilities Commission, will take effect Jan. 1. Spokeswoman Deborah Collette said the request could be considered at the commission's meeting on Dec. 19, during which “action may be taken”

New rates for fully subscribed WindSource customers will average $69.94 a month, up $7.22 from the current $62.72 a month.

New rates for regular residential customers will average $56.88 a month, 16 cents lower than the current $57.04. Those customers depend on Xcel's general system, which generates 59 percent electricity from coal, 35 percent from natural gas, and 3 percent each from hydro and wind.

Xcel's filing underscores the higher cost to customers if more wind power is added to the generation system, said Stan Lewandowski, general manager of Intermountain Rural Electric Association, the state's largest rural electric co-operative serving more than 130,000 customers.

Lewandowski has been a vocal critic of a Gov. Bill Ritter-backed proposal, passed by lawmakers this year, which requires Colorado utilities to get 20 percent of their electricity from renewable sources (sun, wind, plants and animal waste) by 2020 - double the goal of 10 percent by 2015 that was set by Amendment 37, which voters passed in November 2004.

Rural electric co-ops would have to get at least 10 percent of their electricity from renewable sources by 2020.

Customers eventually would pay the cost incurred by utilities to comply with the standards.

"I think you got two problems with wind," Lewandowski said. "When you have over 10 percent (of your total power from wind), the cost gets too much and you have problems with reliability”

However, wind industry advocates said the current lower price of coal and natural gas does not reflect their true price. Also, those fuels likely will pay a carbon tax in the near future that would make them a more expensive source of power generation compared to wind, a freely available source.

Since the passage of renewable-energy standards by Colorado lawmakers, the wind industry has created thousands of construction jobs and hundreds of direct and indirect jobs, said Craig Cox of the Interwest Energy Alliance, a Denver-based group that lobbies for the wind industry.

A study by the group estimates savings of $251 million to Xcel customers from wind energy over the next 20 years.

“We believe a carbon tax (on fossil fuels) is inevitable,” said Mike Mike Mendelsohn, a senior policy analyst with Western Resource Advocates.

“Once a carbon tax is incorporated in the price of electricity, then Xcel's planned portfolio of renewable resources and energy conservation programs will be less expensive than an alternative portfolio of greater reliance on traditional resources such as coal and natural gas”

Paying a price for renewable energy

* Xcel customers who opt to get all of their energy from wind power likely will get hit with higher bills next year. The breakdown:

$69.94 will be the average Xcel Windsource customer bill beginning Jan. 1.*

$62.72 is the current average bill for Windsource customers.

$56.88 will be the average Xcel residential customer bill beginning Jan. 1.*

$57.04 is the current average bill a regular residential customer pays.

Comments

  • December 13, 2007

    6:45 p.m.

    Suggest removal

    sradford writes:

    A revenue neutral carbon tax would return all the carbon tax revenue to taxpayers. Pollution would cost money, and taxes would go down. No big government, no crazy energy prices, no windfall profits for polluters. It's effective, affordable and fair. Check out cocets.org

  • December 14, 2007

    7:07 a.m.

    Suggest removal

    RussDoty writes:

    Windsource customers get more namely no CO2, NOx, So2, mercury, etc. If the cost of cleaning up fossil fuel were rolled into the cost of coal power generation, the price would be more. So the cost of coal is subsidized--up to 1/2 cent a kWh needed to clean up mercury; up to 5 cents a kWh needed to sequester CO2.

  • December 14, 2007

    8:36 a.m.

    Suggest removal

    socrates writes:

    I think if you looked at a five year projection of wind costs vs gas costs, you'd find that in the long term, windsource customers will save significant money. Gas is ready to go through the roof. Wind costs go up when there's capital investment, because that's where all the costs are - the wind is free. Colorado just put in a gazillion wind farms.

    Oh yeah, then there's that whole advantage of saving the planet. That's pretty good too.

  • December 14, 2007

    11:43 a.m.

    Suggest removal

    gerrytodd writes:

    Carbon pollution has a real cost, quantifiable in dollars, which according to true capitalist principals must be paid by those responsible for the carbon pollution. Not to charge those costs to carbon polluters is nothing less than socialism for fossil fuels and the ultimate corruption of capitalism. The solution is to free up the tremendous problem-solving power of capitalism by instituting a carbon fee on carbon pollution. This would make carbon pollution pay its way, thereby incentivizing the market to apply ingenuity to develop alternatives to using carbon-intensive energy--coal, oil, and natural gas. For a more full discussion, see the SOLUTIONS button at www.LegacyEconomy.org.

  • December 14, 2007

    11:12 p.m.

    Suggest removal

    justright writes:

    I must be missing something. To get cheaper wind energy I will have to pay higher taxes on coal and natural gas? But natural gas is getting cheaper because of what? On the other hand wind energy is getting more expensive because what again? And some wizard is saying the answer to future energy is a carbon tax. How is a carbon tax going to create more energy? Of course a carbon tax will just raise the cost of everything. Your heating bill, gasoline, food, etc. will all go up. But some how I am supposed to "feel" better about the energy I use when I pay more. One last question, Who is Big Wind? I know who big oil is but who gets the big wind paychecks?

  • December 18, 2007

    11:22 a.m.

    Suggest removal

    freethinker07 writes:

    I read the initiative. It gives the governor the sole right to set the carbon tax rate yearly. It creates an entire bureaucracy to give back the tax money. It tells the IRS how to treat the refund. (Like they will listen.) It also gives a refund on social security taxes paid. I shudder to think how much this would cost to administer.

    We can't even do reapportionment boundaries for the state legislature every ten years without going through the Supreme Court. This would end up in court every year.

  • December 19, 2007

    10:57 a.m.

    Suggest removal

    thinkaboutit writes:

    Waydaminnit. If natural gas (the resource as a fuel) has a price, which is allegedly declining, how can wind (the resource, as a fuel) which is free, be more expensive? What is the basis for this calculation? Oh, I know, Xcel calculates the 'capital costs' for constructing wind farms, but what about the capital costs for natural gas plants, their maintenance and so on? Is this a fair "apples to apples" comparison? Non-renewable energy sources are subject to market fluctuations, but not so for wind or solar resources, the actual "fuels" as they are free, abundant and non-polluting, requiring no heavy machinery to extract, refine, pipe, transport, etc.

  • May 21, 2008

    8:33 a.m.

    Suggest removal

    prk166 writes:

    So the reporter didn't ask the wind power lobbyist how they can claim to have saved customers $250million at a time the average wind user is paying 20% more than normal customers???