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BLAKE: That's why they call it 'green'

By Peter Blake, Special to the Rocky

Published February 28, 2008 at 12:05 a.m.

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There are Baptists and there are bootleggers, and it's delicious when one of the former falls off the wagon and becomes one of the latter.

But I'm getting ahead of myself. Last week's column, on how Xcel Energy was co-opted by the environmentalists, and how both sides then co-opted the legislature and the Public Utilities Commission, prompted a note from reader Dennis Senger.

He reminded me that the new coalition fits right in with a regulatory theory, advanced in the 1980s by Clemson University economist Bruce Yandle, called "bootleggers and Baptists."

The theory was named after that odd alliance that kept states or counties dry even after national Prohibition had ended. The Baptists, for moral reasons, didn't want Demon Rum sold legally. But neither did the bootleggers, since legitimate businesses would undercut their high-risk, high-profit moonshine. The moralists and the vested interests needed each other. One couldn't have succeeded in passing legislation without the other.

"Baptists flourish when their moral message forms a visible foundation for political action," wrote Yandle. "Bootleggers are much less visible but just as vital." Since they expect to profit from the expected regulations, they "grease the political machinery" with lobbyists and cash.

The principle holds even though anti-alcohol blue laws have mostly disappeared. In today's world, the new religionists tend to be environmentalists, not Baptists. They're eager to save the world from global warming by forcing cutbacks in what they consider to be our sumptuary lifestyle. They want to eliminate cheap but dusty old coal and generate power with natural gas, wind, sunshine, canola oil, attar of roses - whatever will cost you more. But they couldn't succeed without the cooperation of the bootleggers, in this case Xcel and the growing army of subsidy-dependent renewable-energy producers.

Amendment 37, an initiative approved by voters in 2004, was designed by renewable-energy advocates. It specified that 10 percent of the power generated by the state's largest utilities had to come from renewable sources by 2015. Most will come from wind, which, though unreliable as a baseload source, is relatively cheap. But solar, although far more expensive, has its advocates, and they must be appeased. The initiative specified that 4 percent of the 10 percent be generated by the sun.

The voters chose in 2004, but three years later the legislature was so confident that renewables were popular it decided to kick up their share to 20 percent, by 2020, without a referendum.

Rick Gilliam of Western Resource Advocates, a nonprofit environmental group, was the principal author of Amendment 37 and its registered representative. In 2005 and 2006, after Amendment 37 passed, he won major environmental awards.

But in January 2007 he leaped from the Baptists to the bootleggers, joining SunEdison of Baltimore as director of Western states policy. SunEdison had just landed a contract from Xcel to build the largest "solar electric farm" in Colorado, near Alamosa. Designed to produce 8.22 megawatts capable of powering 2,600 homes along the Front Range, it cost $60 million. It went online late last year.

The contract provides that Xcel will buy renewable energy credits and the solar power generated by the plant for 20 years.

SunEdison is also involved in building solar units on customers' rooftops, which must provide half of the solar energy requirement.

A spokesman for the National Renewable Energy Laboratory said power from photovoltaic panels cost on average 22 cents to 25 cents per kilowatt-hour, compared to 4 cents to 6 cents for wind power. But the law must be served, and it specifies that all Xcel customers, not just solar users, must pay extra so that Xcel doesn't lose any money.

Gilliam wasn't the first and won't be the last green to jump to a commercial enterprise from the movement. But few have actually written the law that creates their fortune.

He created an interesting corollary to the "bootlegger and Baptist" principle: After a few years of doing good, why not do well?

Peter Blake is a former Rocky Mountain News political columnist. He can be reached at pblake0705@comcast.net.

Comments

  • February 28, 2008

    4:17 a.m.

    Suggest removal

    a_watcher writes:

    This is an exceptionally informative and well written editorial.

    It only leaves out one thing, how wealthy the Baptists and the bootleggers are making themselves at public expense.

    The next set of Baptists will want to relieve the poor of the penalty that high utility bills imposes and get themselves wealthy in the process.

    At some point, the state would do well to impose caps on the salaries of non profit employees when non profits act so clearly against the public interest.

  • February 28, 2008

    7:02 a.m.

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    sqjnk writes:

    I disagree with a_watcher

    ths artically may be eloquent, but it is not informative. I find it curious how Mr. Blake attacks utility companies and those evil environmentalists for getting subsidies and making profits on technology that creates new jobs, creates more energy security at home (renewable energy is national security) and does something, however small, to deal with our abuse of our home planet. He does this while ignoring the subsidies received by big oil companies and their record breaking profits. How wealthy are they making themselves at the public's expense? How about caps on the obscene amount of profits made by oil company ceo's and executives? The profits and subsidies of renewable energy are a pittace compared to big oil. If you apply standards, apply them equally. To do otherwise is hypocritical and narrow minded.

  • February 28, 2008

    7:10 a.m.

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    VVVV writes:

    Don't worry. Time has a tendency to level the playing field. When we are all paying $600 or more a month on utility bills, there will probably be more incentive to consider cost in new construction, and all sorts of technologies that satisfy the best of both worlds will be cost effective. Pumping exhaust miles underground won't sound so crazy. It won't ever return to the low cost we're used to paying, but maybe it will make fighting a nuclear plant sound as rediculous as it is.

  • February 28, 2008

    7:31 a.m.

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    ghoax writes:

    squink, re-read your post...cap on profits? are you out of your mind? What this country needs is cheap energy, .50 cent a gallon gasoline and the government the heck out of it. In case you missed it, 5 big oil companies palling around with Barbara Boxer are in line for the huge subsidies and joined the global warming chant in order to get their earmarked subsidies...First things first, man made global warming is a complete falsehood, and has never been proven. What has been proven is that renewables cannot meet even 10% of our needs, and that is stated by someone in the green movement based on ..math, physics and the reality that hydro, bio, solar does not have the "firepower" to support our current energy needs, much less have any impact in the future. The same who whine about the sky falling are those who whine about the economy..the two are related, the excessive goverment regulation, thwart the building of new power plants and on an on translates into higher prices for energy..combine that with the reckless abandon on government spending (which causes inflation) we are headed for the dark ages if this entire global warming movement isn't exposed for the lie it is. What we need is the truth about the "green" movement exposed, we need cheap eneergy and oil that we produce here, we need more nuclear power, more oil and gas exploration and production here. This will produce wealth that can be used to find more efficient ways to generate the energy we need. The greens tout the beauty of the hydrogen, ethanol or electric cars, but conveniently ignore the fact that hydrogetn puts out water vapor(the largest green house gas), ethanol production will raise the prices of food beyond imagination, and they ignore the environmental impact of the disposed batteries from the beloved golf carts they want us to be driving. I say this, if you can make cheap energy and gasoline, then you are entilted to all the profit the market will bear. It's energy that drives our lives today, and if you don't like it, you're welcome to leave and live without it.

  • February 28, 2008

    11:49 a.m.

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    Newenergycommie writes:

    Blake has only presented part of the story. The Sierra Club and WRA believe that the only acceptable way to burn coal is by using IGCC. This converts coal into syn-gas which is then burned in a gas turbine to produce power. Here is a list of the companies that produce IGCC not for profit mind you, but simply to save the planet. Halliburton thru its sub KBR, General Electric, Conoco-Phillips, Shell Oil. These good bootleggers are oddly aligned with some very powerful Baptists in an effort to raise the price of energy. And the PUC, the group responsible for looking out for the consumer, is now staffed by Baptists. We are going to follow California off the energy price cliff.

  • February 28, 2008

    1:07 p.m.

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    rhtawney writes:

    Mr. Blake, Isn't there a cap on the rate impact resulting from Amendment 37? I believe the answer is yes, so the legislature and PUC have not exactly given Xcel and environmentalists a blank check. Also, I wonder if there are other positive aspects to having a little clean and renewable energy in the mix which benefit the general body of ratepayers. Cleaner air, conservation for future generations and competitive (downward) pressure on the price of natural gas and coal come to mind. It's appropriate that all ratepayers should be part of the solution. Especially since the rate impact is quite small. Renewable energy and conservation are only part of the solution to high energy prices. I commend the people of Colorado for passing Amendment 37, the legislature, PUC and Xcel energy for taking steps in the direction of stewardship.

    By the way, is this the same Dennis Senger who works for the Office of Consumer Council, the ratepayer advocate office?

  • February 28, 2008

    2:25 p.m.

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    Newenergycommie writes:

    It may not be a blank check, but Mr. Gilliam will do very well at the expense of every ratepayer in the state. Well done Rick. Thanks for saving the planet for us. Take a little something for your efforts.

    Tax credits have been around for wind power for years now. We have more windpower than ever. If wind is so cheap and we built alot of it why do we still need tax credits and were are the often touted "economies of scale"? The price is going up. Maybe someone associated with Amendment 37 is making more money with tax credits than they would without.

  • February 28, 2008

    5:29 p.m.

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    socrates writes:

    The irony is that today, the renewable energy tax credits are getting killed in the congress because no one wants to get rid of the big oil company give-aways. Oil isn't exactly a new and emerging industry is it? But, I know... there are many highly placed politicos on the right who are aligned with Mr. Blake, so we probably won't hear anything about that.

    Anyway, how are they expected to make a living when they're charging $100/barrel for oil? Did someone say something about high energy prices? Oh, right, that's because of renewables.... I forgot.

  • February 28, 2008

    5:44 p.m.

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    Newenergycommie writes:

    Wind is more abundant now than evey before, and the price is rising. We are running out of oil (we've already runout by now according to the enviromneatlist of the 70s)so it is scarce. If you look at econ 101 the price of oil should be rising and the price of wind power should be dropping. Thanks to mandates wind power gets ever more expensive. Every dollar of a tax credit goes in the pocket of the developer and supplier. The price of wind equipment is artifically high, because the tax credits are factored in. Drop the tax incentive and the equipment cost will magically drop by the same proportion. Keep the credits in and no one gets hurt other than rate payers. This is the kind of thing a REAL PUC would consider.

  • February 28, 2008

    7:26 p.m.

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    rhtawney writes:

    Per - http://www.awea.org/faq/cost.html

    The cost of electricity from utility-scale wind systems has dropped by more than 80% over the last 20 years.

    In the early 1980's, when the first utility-scale wind turbines were installed, wind-generated electricity cost as much as 30 cents per kilowatt-hour. Now, state-of-the-art wind power plants at excellent sites are generating electricity at less than 5 cents/kWh. Costs are continuing to decline as more and larger plants are built and advanced technology is introduced.

  • February 28, 2008

    7:48 p.m.

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    prk166 writes:

    rhtawney ---> the problem with the claims on those costs is the lack of consistancy with wind. Look at Denmark. They built a ton of wind turbines years and years ago but have yet to shutter a single fossil fuel plant. They need to keep them sitting around, idle and waiting to be quickly started up to make up for all those times when the wind isn't generating enough if any electricity. Those costs need to be included when evaluating the overall cost of an energy source.

  • February 29, 2008

    9:41 a.m.

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    Newenergycommie writes:

    Great news rhtawney,

    I stand corrected. The cost of wind is the lowest in history. So if it is the cheapest source of energy and can compete head to head with other forms of energy, the tax credits are required because.... Ding ding ding, sorry times up. It is to enrich the wind developer at the expense of the tax payers. Thanks for playing. I believe this is exactly the point Blake was trying to make. Save the planet and fleece the flock.

  • February 29, 2008

    11:08 a.m.

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    Faux_Noise writes:

    "...environmentalists...(are) eager to save the world from global warming by forcing cutbacks in what they consider to be our sumptuary lifestyle. They want to eliminate cheap but dusty old coal and generate power with natural gas, wind, sunshine, canola oil, attar of roses - whatever will cost you more."

    When you start with a dishonest slur like this it's hard to take you seriously. You can't produce one environmentalist who thinks that if we could have our same lifestyle for cheap on renewables, that it would be a bad thing.

  • February 29, 2008

    11:42 a.m.

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    rhtawney writes:

    prk166 ---> I don't think the Danes intended to replace baseload plants with wind. And everyone knows wind power is not always available. However, there are many places where wind makes economic sense despite having backup peaking generation. The point is to avoid burning costly natural gas and coal when it's possible to do so. Do you step on the gas when you're driving down hill?

    Trythinking ---> It's not simply a question of whether taxpayers subsidize wind development. It's also a long-term strategic planning and policy issue. We must also ask if we want to enrich the owners and developers of natural gas and coal power even more than they are currently being enriched. I know Americans want cheap power, but at least some of us also want a clean environment. Wind, solar and other renewable energy resources help give us both. By the way, coal and natural gas technologies have developed over many years at the expense of ratepayers.

  • February 29, 2008

    12:28 p.m.

    Suggest removal

    Newenergycommie writes:

    You are and have been for quite awhile free to purchase wind energy. I however choose to purchase the cheapest most reliable energy available, namely coal. Why should I be forced to subsidize your need to feel better about yourself for buying wind? My question is this, the wind business is good. The wait time for turbines is now 2010 or beyond. I keep hearing that wind is the cheapest source of energy available. Why doesn’t it stand on it own feet without support?

    Clean modern coal plants are highly efficient and totally reliable when compared to wind. They deal with every hurdle tossed their way by the environmental community. Yet they produce energy for an amazingly low price. Something south of $20 is common. In your first post you said wind power cost $50/MWhr. I don't care to make up the difference, thank you. You seem intelligent so I ask a rhetorical question. If we install thousands of wind turbines and extract millions of MWhrs from the energy contained in flowing wind, is it possible we will affect the climate much more than CO2 affects it? Wind energy extracted and converted to power removes energy from the climate system. What are the unintended consequences of a massive wind build out? Could it be that, like corn-based ethanol, the enviros and politicians haven’t quite thought that thru?

  • March 3, 2008

    7:35 a.m.

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    rhtawney writes:

    Please let us know where any utility is projecting $20/MWh for new coal generation. I suspect this is a historical cost, not related to new production. Or perhaps you’re not including the commodity cost of coal and transportation to the power plant. The price of coal and building new power plants is on the rise:

    "The cost of building a U.S. power plant has risen 130 percent since 2000, and 27 percent in the 12 months to October 2007 alone, according to a new index developed by Cambridge Energy Research Associates..."
    http://www.reuters.com/article/rbssEn...

    $49 to $70 per MWh
    http://docs.nrdc.org/globalwarming/gl...

    $64 to $112 per MWh
    http://www.netl.doe.gov/energy-analys...

    I’m not aware of any studies that show wind power would negatively impact the climate or cause pollution. We also need to consider water resources, which are very limited. Wind power does not rely on water as do coal power plants.