Throughout human history, civilizations have routinely faced energy crises. Before we discovered the wonders of petroleum, there was grave concern about the impending depletion of whale oil supplies. In 100 years, we may be faced with shortages of fossil fuels: petroleum, coal, oil shale, tar sands and natural gas. But a recurring lesson of human history is that we tend to solve today’s problems with tomorrow’s technology — which, by definition, is still unknown. In that regard, I’m confident that human ingenuity will develop a future technology to solve today’s energy problems.
Perhaps it will be a breakthrough in nuclear fusion technology to extract hydrogen from plentiful ocean water, cheaply and cleanly. That would truly usher in a worldwide “new energy economy,” in contrast to the over-hyped version of that term in current usage. In the meantime, if enviro-obstructionists got out of the way, we could devote far more economic resources to relatively inexpensive, clean and safe conventional nuclear energy.
While we can all look hopefully to new technologies that deliver energy to the multitudes cleanly and inexpensively at some time in the future, wind power, solar and biomass can’t do that today nor will they any time soon. A so-called new energy economy that replaces BTU-efficient fossil fuels with costly enviro-romantic substitutes, while our international competitors like China and India refuse to participate, would drive up domestic energy costs for consumers and businesses, drive more jobs overseas and lower our living standards, while making nary a dent in worldwide CO2 emissions.
Stan Lewandowski is the general manager of the Intermountain Rural Electric Association (IREA) headquartered in Sedalia serving 137,000 member-owners in Colorado. Stan has kept his head while all about him are losing theirs. He’s refused to follow Al Gore and global warming lemmings over the cliff of economic suicide in pursuit of the grand conceit that human activity is a significant contributor to climate change. And he’s had the courage to urge his IREA consumer-members to oppose the Waxman-Markey cap and trade bill, a bureaucratic nightmare that would bring on a new energy depression — except for those on the receiving end of politicized government subsidies.
Unlike Xcel Energy, IREA is a nonprofit cooperative. Lewandowski and the elected board are committed to serving the interests of their customers, the ratepayers. IREA is constrained by the economic realities of the market place. It doesn’t have the luxury of indulging in fashionable, uneconomic enviro fantasies. Consequently, IREA boasts of the second- lowest rates of any co-op in the state.
Xcel, on the other hand, while a “private” company, is a public utility. Yes, it has stockholders and its shares are publicly traded but, as a monopoly, it’s treated as a quasi-governmental entity regulated by the Public Utilities Commission. When Xcel incurs costs, it must obtain the PUC’s approval to pass them on to consumers in base-rate adjustments or special assessments. Allowing Xcel a reasonable and customary return on stockholders’ equity, the PUC routinely grants these pass-throughs, especially when the costs are environmentally and politically correct.
That makes companies like Xcel less cost- and price-conscious, at the expense of their customers. Check out your bill. It includes the Air Quality Improvement Rider, the Renewable Energy Standard Adjustment and the (voluntary) Windsource Charge. The cost effectiveness of these programs is at best debatable. Public utility monopolies are recession proof, essentially free from competition and generally unsinkable. They are also pragmatic political animals and, unlike Stan Lewandowski and IREA, are not likely to take on politicians and activist enviros. That helps explain why Xcel supports terrible legislation like Waxman-Markey while IREA opposes it.
Incidentally, my last Xcel Energy bill reported Denver’s average daily temperature for this year’s billing period compared to last: 2009, 71 degrees; 2008, 78. This global warming sure is hell!
Mike Rosen’s radio show airs weekdays from 9 a.m. to noon on 850-KOA.
