Environment, Peter Blake

Government picks winners and losers, even amongst wind, water and sun

The Colorado legislature’s effort to tell the rural electric associations (REAs) how to do business proves, once again, that it doesn’t take long for a righteous cause to morph into just another fight over market share.

Let’s assume, for the sake of argument, that there are folks who really believe in renewable energy because they think we’re running out of fossil fuels or that they’re bad for the environment.

If they were consistent, they would happily let hydropower play its full part. After all, water leaves no carbon footprint and tends to flow downhill 24/7. It doesn’t stop generating when the sun goes down or the wind stops blowing.

But the legislature permits only the smallest hydro operations to count toward the renewable-energy mandates it has imposed on rural electric associations. The majority wants to force utilities to use wind and solar, which must be subsidized because they cost too much to compete directly with coal and natural gas.

Last year’s Senate Bill 252 requires REAs to produce 20 percent of their power through renewables by 2020, double the earlier standard.

Because of the extra expense that would involve, there have been several efforts this year to repeal or modify that bill, but all have failed.

For instance, House Bill 1138 would have allowed the renewable energy standard to include all hydroelectricity and pumped hydro. (The latter is water pumped back up to a higher reservoir from a lower one during off-peak hours, when electric rates are low. Then it is released back through the turbine when rates are high.)

Just what is renewable energy? “It’s whatever you guys tell us it is,” said Geoff Hier, an REA lobbyist testifying for the bill. Currently, in Colorado, it’s wind, solar, biomass, geothermal, new hydro producing 10 megawatts or less, and pre-2005 hydro of 30 megawatts or less.

In other words, completely arbitrary and artificial. If small water is good, why is big water bad? Every state requiring renewable energy has a different definition.

Sarah Propst is executive director of the Interwest Energy Alliance, a trade association for companies in the renewable field. She spoke against the bill, claiming it would in effect repeal 252, since the REAs already get hydro from old hydro plants built around the West. It would be a “windfall” for existing projects and would “wipe out” hundreds of construction jobs and lease payments that new solar and wind facilities create.

She’s correct in that it would effectively repeal 252 and not create new jobs. According to Hier, the REAs get from 12 to 17 percent of their power from existing Western Area Power Administration dams, depending on snowpack and stream flows. Existing wind and solar would push the figure up over 20 percent.

But you don’t manufacture power — or any other product — just because it would result in more jobs. Jobs are simply a happy by-product of somebody making something that the market wants, not an end in themselves. Efficient companies try to keep the number of employees down.

The REAs, being cooperatives owned by their customers, want to keep the price of power down by getting the most inexpensive electricity they can. They don’t want to create needless jobs and have to pay a premium for its generation.

Ordering expensive electricity from renewables is like commanding energy companies to drill in areas where there is little or no chance of hitting oil or gas. Sure, that will create many jobs but a dry hole has no value no matter how many dollars it cost to drill it. There is no value in the labor itself, only in the end product. This is basic economics.

Renewable fuels are fine so long as they can compete with coal and natural gas without extraordinary subsidies. But they seem to be latest incarnation of ethanol. A renewable fuel! It was every environmentalist’s darling a decade ago. Not only was it supposed to reduce carbon dioxide, it was going to help the U.S. become more energy self-sufficient. In 2007, Congress mandated that increasing amounts be added to gasoline — 36 billion gallons by 2022.

But the extra production of corn drove up price of feed and food, reduced the efficiency of gasoline, produced more instead of less carbon dioxide, took millions of acres out of conservation and required more fertilizer that polluted streams.

Environmentalists started turning against the ethanol mandate. But no matter, by now it was a major economic interest for farmers and distillers, especially in the politically crucial state of Iowa. The mandate continues.

So it is with renewable energy. Also testifying against HB 1138 was Chris Votoupal of Colorado Cleantech Industries Association, another industry group. Like Propst, he complained that passing 1138 would kill new jobs. Allowing existing hydro power to count against the 20 percent standard, he said, would be like “rearranging all the drinks on the bar and claiming you bought a new round.”

That’s true, but that’s good. Why should rural Colorado have to buy a new round of drinks for the so-called renewable energy industry? The REAs are entitled to the least expensive power they can find.

Nevertheless, the House Transportation and Energy Committee went with the greens’ effort to increase their market share and killed HB 1138 on a party-line vote, with all the Democrats voting no.

Longtime Rocky Mountain News political columnist Peter Blake now writes Thursdays for CompleteColorado.com. Contact him at pblake0705@comcast.net You may re-publish his work at no charge and without further permission; please give full credit to Peter Blake and www.CompleteColorado.com

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