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United States

The power of choice

If wind power is to go mainstream, two things have to happen. First, the market has to grow beyond environmentalists. Second, we have to kill the cheap power paradigm. For 80 years, the American utility industry and its regulators have put cheap power on a pedestal. In most contexts, cheap means "second-rate." More expensive than coal, wind remains a tremendous bargain--it costs less than dog biscuits, a bad haircut, two six packs of beer.

Driving home from work today I heard a radio ad for, of all things, wind power. The saleswoman's pitch went like this: "In Colorado every penny we spend on wind power keeps one pound of carbon dioxide, the chief greenhouse culprit, out of the air. Let's be penny wise, not pound foolish." The ad was sponsored by the Aspen Skiing Company, a world-class resort now running one of its lifts on wind power.

Until 1996 such an ad would have been unthinkable. Before then our state had zero wind turbines. Time and again clean energy advocates had beseeched our utility commission to force Public Service Company of Colorado to install wind power. Time and again we were rejected. Two years ago we changed tack and formed a partnership with PSCo to sell wind power on its merits. We wanted to give Coloradans the choice to buy wind power in lieu of the coal power they now receive. We wanted to give the market a chance to do what policy had not. We wanted to move generation decisions from utility boardrooms to family living rooms. Since then the Colorado green pricing program, Windsource, has become one of the largest of its kind. More than 1,000,000 Colorado households now have the option to buy wind in lieu of coal, and about 10,000 have signed up. And its not just residential customers-telephone giant US West, IBM, and beer manufacturer Coors are all buying wind power.

It's easy to dismiss such green marketing programs, now offered by about 50 US utilities. Typically they attract just 1% to 3% of eligible customers. But Windsource has been a surprising success. In less than two years, we've sold 15 MW of wind, with 5 MW more going fast. This success also emboldened our utility commission, which recently ordered PSCo to install another 25 MW of wind, spreading its cost over the entire rate base. So markets reinforce rather than undercut policy. Granted, 45 MW is a pittance in the grand scheme of things. But you have to crawl before you can walk. The wind industry now has a toehold here in Colorado that it never had before.

What does our experience suggest about the power of choice? Like generals preparing to fight the last war, electric utility CEO's slash their workforces, merge with their neighbours, and prowl for takeover targets overseas. The officer corps has convinced itself that in a deregulated world the battle between competing providers will be decided on price. But what if the battle turns out to be between competing products, coal versus wind? What if millions of customers decide they are more interested in clean than cheap?

Right now, clean energy is a so-called "niche" product, appealing mostly to hard-core environmentalists. But niche can go mainstream in a hurry. Combine choice with climate change and what do you have? A combustible mix that could radically reshape the electric utility industry. Choice educates. Choice informs. Twenty years ago we Yanks smoked like the French. Today-thanks to a simple question, Smoking or non?-our airlines and restaurants are smoke-free. Based on our experience, I can foresee a time when buying coal power is as unfashionable as smoking in a hospital or urinating in a public park.

Do you drive a Yugo?

If wind power is to go mainstream, two things have to happen. First, the market has to grow beyond environmentalists. Second, we have to kill the cheap power paradigm. The Christian community has developed a new-found interest in climate change. California clergy are raising hell about global warming and entire congregations are buying wind power. It's an advertiser's dream, broadcast free from the pulpit each Sunday: wind energy is a higher power. You take Greenpeace, give me the nuns.

For 80 years, the American utility industry and its regulators have put cheap power on a pedestal. In most contexts, cheap means "shoddy" or "second-rate." Do you buy the cheapest ice cream, put powdered dairy creamer in your coffee, drive a Yugo? Of course not. But when it comes to electricity, cheap is best, right? If similar thinking prevailed in the underwear industry, Calvin Klein would sell only burlap bras and boxer shorts. Scratchy sure, but cheaper than cotton. A Public Underwear Commission would ensure that he didn't try to blend some pricey silk garments with the burlap ones. If consumers complained, the PUC would say, "Quit itching. Americans want cheap undies. Burlap is best."

More expensive than coal, wind remains a tremendous bargain. Give a Colorado utility one dollar, they'll burn 14 pounds of coal. Spend $10 a month extra to buy wind power in lieu of coal, and you'll keep 10,000 pounds of CO2 out of the air each year. My family of five spends 80 times as much on food. Wind power costs us less than dog biscuits, a bad haircut, two six packs of beer. Speaking of beer, last month New Belgium Brewing Company's 70 employees voted unanimously to quit buying coal power and to replace it with energy from a new Vestas turbine. Any employee could have vetoed the deal. None did, even though it will put a modest dent in their profit sharing plan. Leading brands like Toyota and Patagonia are buying 100% renewable energy in California.

America is not ready to launch a carbon jihad. Not yet. But once we do, we'll be building wind farms with a vengeance, planting turbines as if they were trees. Our wind resource is enormous and within ten years buying wind power will be as all-American as motherhood and apple pie.

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