On the “Green” Gravy Train
On the “Green” Gravy Train
I think most people have figured out that many scientists and activists are on the “green” gravy train. After all, there are trillions of dollars at stake, and money is no object. But most do not understand that many utilities have teamed up with climate alarmists to promote expensive and unreliable wind and solar energy. Why would utilities do that? Because they make lots and lots of money from “green” initiatives.
Energy Bad Boys is a substack run by my former American Experiment colleagues Isaac Orr and Mitch Rolling. The linked post is by my former colleague Sarah Montalbano. This group mostly comprises Always On Energy Research, a dynamic consulting firm that, among other things, analyzes the costs 0f energy projects.
The linked post addresses the case of Xcel Energy and Colorado. It is long and detailed, and if you want to understand why America has largely pursued irrational energy policies in recent years, you should read it all. I will try to excerpt a few paragraphs that convey the point. See the original for numerous links:
In a startling report submitted to the Colorado Public Utilities Commission, Xcel Energy admitted that it will likely be in a “capacity deficit”—-which is a nice way of saying its system does not meet its reliability requirements—-from now until at least 2028, unless it keeps its Colorado coal plants open.
One almost feels bad for the predicament the company finds itself in, and we may even have a brief glimmer of admiration for its willingness to bluntly highlight the issue, but then we remember:
* In 2018, Xcel became the first investor-owned utility to declare its self-imposed environmental, social, governance (ESG) goal of making its system carbon-free by 2050;
* It has a history of giving thousands of dollars to climate groups like Fresh Energy in Minnesota and Western Resource Advocates in Colorado, and working with them to push for the closure of its coal plants and decarbonization mandates, and;
* Xcel lobbied in favor of the carbon-free electricity mandates passed in Minnesota and Colorado.
Furthermore, when we look at Xcel’s most recent investor presentation, we see that the company is practically giddy about all the ratepayer money it will spend on wind, solar, and batteries, which will increase its rate base and, in turn, its corporate profits.
This is a key point. In order to maximize profit, investor-owned utilities need to make capital investments, on which, if those investments go into the utility’s rate base, it is guaranteed a return of principal and a healthy profit. It is a great business model, especially if you can lobby a state legislature to impose mandates that will guarantee that “green” expenditures–being required by the state, after all!–will go into the rate base.
The problem is that, however profitable they may be, wind and solar can’t keep the lights on. So Xcel has now admitted to the State of Colorado that if they want reliable energy, they are going to have to rely on coal:
Further into the report, it states that, “Near-term, the most likely capacity solutions are continued extensions of existing units—namely, Comanche Unit 2 and, to a lesser extent, the Hayden units.” Additionally, regarding repairing and restarting Comanche Unit 3, Xcel found “that the incremental cost to replacing Comanche Unit 3 would be magnitudes more expensive for customers than” restarting the facility, and that “there are no reasonable alternatives to returning Comanche Unit 3 to service.”
Comanche Station in Pueblo, Colorado, includes coal-fired Comanche units 1, 2 and 3. I know a great deal about Comanche 3, perhaps the last coal-fired plant Xcel will build, not because of energy policy issues but because its construction resulted in a lawsuit in which my team and I represented Xcel. The case was brought by the principal prime contractor on the billion dollar-plus project, and it was one of the largest cases I tried, as we sent damage claims of $200 million to the jury. It was the biggest case tried in Colorado in 2010. It is ironic that Xcel and the State of Colorado now contemplate a premature shuttering of that relatively new power plant, although, as Xcel now says, Colorado had better keep it open if the state doesn’t want blackouts.
Greenism works great for activists and utilities, but not at all well for the rest of us–those who use electricity–as this chart shows:
There is a great deal more at the link, but that, I hope, at least conveys the gist. Hats off to the crew at Always On Energy Research for bringing solid data and a dose of common sense to debates over energy policy.
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