Rush Creek Wind Project

Irresponsible by Nature: No need for, no need to rush Rush Creek Wind Project by Michael Fumento with contributors Amy Cooke and Michael Sandoval IP-5-2016 | June 2016 727 East 16th Avenue | Denver, Colorado 80203 www.IndependenceInstitute.org | 303-279-6536 | 303-279-4176 fax Introduction If the Colorado Public Utilities • Wind farms are infamous for killing Commission (PUC) rushes approval of birds and bats. Xcel at least needs to Xcel Energy’s proposed wind project allow time for themselves and others to Rush Creek – as the utility wants – the investigate what the company can do to Commission will not be serving the best mitigate the problem. It also requires interests of Coloradans, Xcel’s 1.4 million time to show compliance with the ratepayers, or wildlife and, indeed, will Endangered Species Act. have an adverse impact on all Americans. • Xcel’s requested compressed timeline There is nothing to be gained and prohibits appropriate and thorough everything to be lost by allowing the utility vetting of the 95,000 acre, $1.1 billion, Rushing the time- to rush this project through without Xcel, 90 mile transmission line with 150 feet interested parties, and others having the of right-of-way, and 300 turbine wind line and approval opportunity to study its economic and project spanning five counties. process disre- environmental impact. • Rushing the timeline and approval spects the PUC, process disrespects the PUC, all Among the many objections are the Coloradans and ratepayers who have all Coloradans following: the right to expect neutral regulators to and ratepayers • The state does not presently need take the time allowed under state law who have the more electricity; Xcel does not claim to consider all aspects and hear from right to expect otherwise. all interested parties regarding projects • Xcel claims it has already met the that will have enormous financial and neutral regulators state’s renewable energy mandate. environmental impacts on the entire to take the time • If the primary concern is emissions, state, indeed the U.S. allowed under the most efficient, least expensive way • This project appears to have only one to reduce greenhouse gas emissions real purpose: to enrich Xcel’s coffers state law to con- (GHGs) as well as EPA “criterion with the Production Tax Credit (PTC). sider all aspects pollutants” is to generate electricity Yet the PTC shouldn’t even exist. and hear from all from Colorado natural gas. interested parties • The project does not save Coloradans By delaying its public application until the money as promised unless federal very last minute, Xcel has demonstrated regarding proj- subsidies are passed along to a high level of arrogance as it has ects that will have ratepayers. Otherwise it will cost them. privately executed plans to move ahead enormous finan- In any case, all American taxpayers with the project, simply assuming the will be paying for this project. PUC would rubber stamp it. This is all cial and environ- • Colorado’s electricity rates have the more arrogant given that the PUC mental impacts skyrocketed over the last decade. This denied the utility’s last renewable energy on the entire project will exacerbate that trend. effort, the expansion of its Community 1 state... • The project requires an estimated 90 Solar Gardens. Furthermore, Colorado’s miles of transmission lines, reducing largest investor owned utility has engaged efficiency. in questionable outreach tactics to local • Xcel uses the term “estimated,” elected officials in order to garner support implying that rights-of-way have not for the Rush Creek Wind Project. The yet been acquired, which may slow the PUC actually has a function and a project. valuable one. If Xcel believes otherwise, let • Maintenance problems with wind it lobby for its abolition. turbines are unique, and Xcel needs to address them. 1 What is Xcel thinking? Likely, it is not. Colorado ratepayers who will be paying This is Xcel’s first effort to construct its for the project, and indeed Xcel’s promise own wind project, and it is clear they do of saving Coloradan ratepayers “hundreds not know how to do it. of millions of dollars” is predicated on such a pass-along. Colorado does Should the PUC grant approval, at the not need extra very least the Commission should require Minnesota-based Xcel Energy to pass generating along its considerable subsidies in the form capacity at this of the Production Tax Credit (PTC) to time. Even as the population has No need for increased electrical been increasing, capacity power consumption has barely Colorado does not need extra generating pass muster, especially given the death of done so. capacity at this time. Even as the Justice Antonin Scalia.5 But proponents population has been increasing, power of the plan say Colorado is already well consumption has barely done so.2 positioned to meet the required standards.6 The state legislature has mandated that The fastest and most efficient means of by 2020 investor-owned utilities, including reducing GHG emissions is to generate Xcel, must have at least 30 percent electricity from Colorado natural gas. Xcel “renewable fuels” in their mix, but Xcel says it already has significant capacity claims it has already met that mandate.3 at natural gas plants to do this without Further, the EPA’s so-called “Clean Power actually having to build new ones.7 Plan,”4 while remanded to lower courts by the U.S. Supreme Court, may yet Job claims This project is also being sold as a jobs It’s also always fallacious to pretend that program, which is disingenuous. David these projects create jobs. The same Eves, Xcel’s president and CEO of Public amount of money spent in any other area Service Co. of Colorado, Xcel’s subsidiary would also generate jobs. Ultimately, if in the state, said in April: “Our plan is the goal is to create the most jobs with an to expand our wind offerings to provide energy project, then putting Coloradans hundreds of new jobs for Coloradans . on large hamster wheels connected to the . .”8 Many of the jobs, those in turbine grid would achieve the same end. construction, will last only about three months.9 Xcel spokesman Mark Stutz told the Denver Post that the Rush Creek project will create “350 construction jobs, and then six to 10 permanent jobs.”10 Further, despite Xcel’s repeated talk of these being “well- paying jobs,”11 Bureau of Labor Statistics data indicate that elevator installers and repairers earn on average 60 percent more than wind turbine technicians.12 2 Economic development for rural Colorado? Former state lawmaker Greg Brophy, that benefits rural Colorado without a Republican who represented Eastern costing anyone else a dime extra?”14 Colorado from 2005-2014 and now lobbies with State Senate colleague Josh Penry Mr. Brophy relies upon a classic economic at EIS Solutions, suggests wind farms are fallacy that intentionally fails to take into economic drivers for rural Colorado: account the opportunity costs of higher “Any [County] commissioner from electric rates due to this project and the eastern Colorado understands that royalty millions of dollars in taxpayer subsides payments make a huge difference for that will enrich Xcel at the expense of farmers and ranchers in rural Colorado. taxpayers. If Xcel gets its rushed approval With a project so Further, commissioners from a half dozen for Rush Creek, then interested parties rural counties know that property tax will be denied appropriate time to analyze large, so com- payments from wind farms provide much Mr. Brophy’s claims and identify those plex, so expen- needed revenue to provide basic services opportunity costs. sive, requiring del- for their constituents.”13 Mr. Brophy then icate cooperation asked, “Why do you want to stop a project from so many different govern- This project is entirely subsidy- mental entities, driven why would Xcel request such a With a project so large, so complex, so December 31, 2020, will qualify for the compact time- expensive, requiring delicate cooperation 2016 PTC level of 100 percent.”15 line? from so many different governmental entities, why would Xcel request such a In order to take full advantage of millions compact timeline? The answer is simple – of PTC taxpayer dollars, not only does the to enrich Xcel at taxpayer expense. company have to get the project approved, but it also intends to spend 5 percent (more On page two of Xcel’s Motion to than $50,000,000) of the $1 billion plus “Shorten Notice and Intervention project budget before the end of 2016. Period” the company cites the Omnibus This seems a little like playing roulette with Appropriations Act, which President ratepayer money, but if it gets approved Obama signed into law on December 18, then Xcel stands to make hundreds of 2015. millions of dollars. “The Act includes a five-year extension of the Production Tax Credits (“PTC”) Subsidies are what this wind project is for wind and other eligible renewable all about. Originally they were intended energy projects. While the PTC has been to kick start the wind (and solar) energy extended for five years, its decline [phase- sectors, but the wind industry claims that out period] begins after December 31, it is now well-established.16 Xcel even states 2016. Eligible projects that meet the safe on its Web site, “The cost has declined, harbor under the Act, i.e., expenditures making wind energy competitive with of 5 percent of the total project cost by natural gas generation …”17 If wind is now December 31, 2016 and in service by competitive, why the need for subsidies? 3 Part of the explanation is that wind is there are two taxpayers in a typical not competitive with gas, much less with Colorado household, then they will have cheaper coal.

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