Guest Columns

HUDSON: Who profits when the wind blows?

Transwest could really transform the West

The Colorado Statesman

Craig is one of those sun-baked Colorado towns you generally zip through on your way to some place else, only pausing long enough to gas up. It’s the kind of small town where the local paper features interviews with the new teachers arriving for the upcoming school year. Yet, last Friday the Department of Energy’s Western Area Power Administration (WAPA) and Interior’s Bureau of Land Management (BLM) scheduled a public involvement meeting to explain the proposed Transwest Express Transmission Project that may soon extend 725 miles from Rawlins, Wyo. to Las Vegas, Nev. Only 30 or 40 residents trooped over to the brand ‘spanking new’ Colorado Northwestern Community College campus to inform themselves about the particulars of the 600-kilovolt high-voltage, direct current line that would slice across Moffat County carrying wind power from southeastern Wyoming to the hub where it can be ‘wheeled’ into the California and Southwestern electric grids. Its 3,000-megawatt capacity is a lot of juice — more than enough to power 3 million homes. This proposal may prove a harbinger of many more to come — transmission lines that will profoundly alter both the economy and character of the American West.

The draft Environmental Impact Statement (EIS) has been released, a preferred route identified, and contractors are beginning to haunt the hallways (even at Craig) in hopes of securing a piece of the project’s nearly $3 billion construction budget if, as expected, the project wins final approval next year. Although WAPA and the BLM have acted as co-leads on the EIS, the Transwest Express application originates with Denver’s Anschutz Corporation, which plans to construct a thousand 3-megawatt wind towers on the ranches it owns in Wyoming’s wind corridor to the tune of another $5 billion dollars. Fossil fuel fans have always objected to government subsidies designed to encourage renewable energy development, arguing these technologies should prove themselves competitive in the marketplace. Apparently, for wind at least, that moment has arrived. For over four decades Phil Anschutz has demonstrated an uncanny knack for moving ahead of the markets, bolting out the door with his cash just before the fiscal roof collapses and investing it in the next big thing.

If my 401K managers had been shrewd enough to abandon oil and gas in favor of railroads, selling those in time to buy into the telecommunications bubble, then fleeing again in time to invest in entertainment, and finally jumping into renewable energy, my retirement would appear much rosier. In fact, if a mutual fund had simply tracked Anschutz bets since the 1970s, it would enjoy a roster of exceedingly satisfied clients. It seems likely that Colorado’s favorite billionaire is on to something with this $8 billion dollar bet. 

Peabody's Twentymile coal mine at Safe Creek and Routt County's largest employee.
Photo by Miller Hudson/The Colorado Statesman

Perhaps it is mere coincidence that Michael Bennet, one of Anschutz ‘smart young men,’ now serves in the United States Senate and the Department of Interior was helmed by Ken Salazar, another Coloradan, as Transwest submitted its application. On the other hand, this concatenation of good fortune serves as the subject of conspiracy theories and midnight mutterings. Either way, it is safe to say the stars were aligned for Transwest. A new president was committed to encouraging a shift to renewable sources from fossil fuels. He included billions in his economic stimulus package for transmission improvements that would enable access to the electric grid for wind and solar projects. Of course, the mere fact that the grease buckets were open and at the ready may have been all that was required to energize an historically sclerotic bureaucracy.

Preferred and alternate routes for the Transwest transmission lines.

Transwest deftly offered 50 percent of its transmission capacity to WAPA as a prospective partner in its project — one with easy access to the aforementioned federal dollars gathering dust in the stimulus drawer. Even potential competitors have been willing to remain mute, allowing these federal agencies to do the heavy lifting in complying with the National Environmentl Policy Act process. If Transwest flies, Duke Energy’s Zephyr project is already standing in line along with several others that are ready to go. Surprisingly, the wind resources in Wyoming are extensive enough to power the entire country, (except, of course, when the wind isn’t blowing) with average year-round wind speeds of 42 mph along its premiere corridors. The fact that Anschutz can potentially fill the entire capacity of his line, to the exclusion of others, isn’t as objectionable as you might expect. More important for other players is prying open the regulatory gate for the delivery of Wyoming’s wind energy in every direction. Western Resource Advocates out of Boulder estimates that 25,000 miles of new lines will be required across the west in order to provide distributed transmission access to the grid for renewable projects. Transwest represents the nose of the camel under the flap of the tent.

Environmental groups have nothing but kind things to say about the professional skills demonstrated by Transwest. “They work very hard and very smart,” former Public Utilities Commission Commissioner Ron Lehr observes. Whether you are concerned about sage grouse, desert lilies or big game migration routes, Transwest has developed a plan to mitigate its impact. One hundred and fifty foot towers will be placed a thousand feet apart within a 250-foot-right-of-way. The line will rely on direct current (a tip of the hat to Edison) as it saves about 8 percent on transmission losses experienced with alternating current. When you are pumping tens of millions of dollars worth of electrons, daily such small efficiencies add up. The development of a ‘green grid’ that assures renewable access to the existing transmission network has made for some odd bedfellows. The fact that Phil Anschutz could emerge as the toll collector on the renewable energy highway bothers environmentalists not a whit. Whether there will be customers for all this power is a billion dollar question that remains unanswered, but if Transwest is willing to take that risk, then the climate warming alarmists are willing to wish them well. At this juncture, no one is pushing to see delivery contracts.

Often the anecdotes collected by pollsters can be more informative than the actual statistical breakdown of responses. Twenty years ago the Edison Electric Institute wanted to measure the acceptability of alternative electric generating strategies. They provided an extensive tutorial on the pros and cons associated with the construction of hydroelectric dams, coal-fired generating plants and nuclear reactors. At the conclusion, participants were asked which they would choose to meet growing electric demand. One individual responded, “I don’t want any of those, I want electricity like we get out of the wall!” Without getting ourselves diverted into a discussion about the quality of science education, there exists a widespread ignorance regarding the technologies that underlie modern economies. Electricity, unlike water or food, cannot be effectively stored. It must be managed. The energy being generated has to be balanced against the energy being used, and that balance must track with demand. This is a considerable task that takes place in control centers that are monitored 24/7 as we flip on our air conditioning and turn on our TVs.

But, as with much of our public infrastructure, we have permitted 20 years to elapse with little or no investment and absolutely zero modernization of the electric grid. It’s now a rickety structure, prone to cascading failures. The eight or 10 companies that once constructed transmission lines have shrunk to just a pair — likewise for the cable manufacturers. Transwest will pay a premium for this neglect, but they may also help jumpstart a rebirth of American prowess. The wind farms, solar arrays and transmission infrastructure that will eventually serve this ‘green grid’ may soon deliver an economic bonanza for the rural west as well. As one of WAPA’s outside experts told me, “Transmission lines pay property taxes (estimated to be as much as a million dollars in Moffat County), and they require no policing, no public expense. They won’t put kids in local schools or trucks on local roads. And, better yet, someone in California will pay those taxes.” Aside from visual pollution, and few people will actually ever see them as they cross the ‘empty quarter,’ this sounds like a deal!

Leaving Craig, the skyline is dominated today by Tri-State’s Craig generating station. Together with XCEL’s Hayden plant — both coal-fired behemoths that provide base load power to the western grid — they are currently the largest employers in Moffat County. Relying on coal strip-mined from adjacent seams, it is still hard not to suspect these are fossil fuel dinosaurs. At the Twentymile Mine on Sage Creek in Routt County, Peabody Coal recently invested $200 million in a new portal for the export of its black gold across the country and around the globe. As the winds of energy change pick up speed, one wonders whether they will continue to find customers in the years ahead, even for the ‘cleanest coal’ in the world.

Columnist Miller Hudson writes about public policy for The Colorado Statesman. He can be reached at mnhwriter@msn.com.