Coal is still king, but renewables are rising

Allen Best
Holy Cross Energy buys most of its wind power from the Ponnequin windmill farm near the Colorado-Wyoming border east of Interstate 25. (Courtesy Xcel Energy)

Five or six years ago, Tom Golec began exploring the idea of installing a turbine on Ruedi Creek at his home 15 miles northeast of Basalt. With that turbine, he figured to provide clean, non-polluting power to his neighbors.

To do that he needed to deal with Holy Cross Energy, the rural electrical cooperative that serves most of the Roaring Fork Valley as well as the Interstate 70 corridor from Vail to Battlement Mesa. And he distrusted Holy Cross. As a longtime subscriber of Home Power magazine, he had read stories that darkly described rural co-ops like Holy Cross. They all embraced coal and other fossil fuels, but gave a cold shoulder to producers of electricity from alternative sources.

In other words, Golec expected to find an enemy in Holy Cross. But after extensive negotiations, he changed his mind. The utility was willing to pay him not only the price it would otherwise pay for electricity from a coal-fired plant, but it paid him an incentive to build his 25-kilowatt “microhydro” generating plant.

“When push came to shove,” says the 59-year-old Golec, “they were my friend.”

Because of such policies and programs, many environmental activists consider Holy Cross to be exceptional, not only in Colorado but possibly in the nation. On the demand side, the utility encourages energy efficiency. On the supply side, it encourages use of small hydro, wind and other alternative sources. The two initiatives have a $1 million annual budget.

The goal with both is to burn less fossil fuel, and hence to lessen environmental damage. Although not at first, this unusually aggressive stance is driven by an institutional embrace of global warming theory.

“Holy Cross is very unusual within the 900-plus rural electric cooperatives in the United States,” says Paonia resident Ed Marston, former publisher of High Country News and also a 17-year member of the Delta-Montrose Electric Association. “I don’t know them all, of course, but among the ones in this region, Holy Cross stands out.”

Marston argues that Holy Cross, as a rural cooperative, hews to its roots in progressive politics. By that he means that it listens to what people want ” cleaner air and fewer greenhouse gas emissions.

Rural cooperatives sprung from New Deal legislation of the Great Depression. Towns and cities, including Aspen and Glenwood, had enjoyed electricity for decades, but not rural areas. Some 90 percent of urban residents had electricity going into the 1930s, but only10 percent of rural residents.

In response, Congress in 1936 created the Rural Electrification Administration, an independent federal agency that offered long-term, self-liquidating loans to rural cooperatives and others. Critics saw this as a stride toward socialism, but the program succeeded in effecting a higher standard of living in most rural parts of the country. With electrification, for example, farmers could eat fresh meat year-round.

Holy Cross Energy was founded in 1939, and like other rural co-ops, consumers are the owners, some 54,000 altogether. (Glenwood Springs, New Castle and the original townsite of Aspen are independent of Holy Cross, while Carbondale, Rifle and Silt are not exclusively served by Holy Cross).

Owners/consumers get annual dividends and directly elect the board of directors to oversee operations. The board includes two directors from the upper Roaring Fork Valley and one from Carbondale. An annual meeting is held every spring (this year it’s June 2), attracting about 300 people.

The bottom line is, well, the bottom line. Randy Udall, director of the Community Office for Resource Efficiency, or CORE, points out that Holy Cross, for all of its green policies, has managed to return $70 million to members/consumers over the years. “It’s a very well-managed company, very profitable, and it is doing a lot of remarkable things on the green side,” he says.

But it is also a balancing act. The most important priorities for lower-valley shareholders are cost and reliability of power. These are also important in the resort valleys of Aspen and Vail, but resort-area consumers are more strongly driven by environmental goals.

This means coal is still king, but not quite as regal in the Holy Cross land. Overall in Colorado, 77 percent of electricity comes from coal, and 20 percent from natural gas. For Holy Cross, it’s 60 percent for coal and 30 percent from natural gas.

About 6 percent of Holy Cross’s power comes from renewables, including wind, microhydo and other non-carbon alternatives. That compares with 3.5 percent statewide. The final 4 percent is miscellaneous.

Analysts cite two primary reasons for this and other environment-friendly strategies.

First, in the early 1990s, Colorado-Ute, a Grand Junction-based cooperative of utilities, went bankrupt. Most member utilities then signed 40-year contracts with Tri-State Generation and Transmission that bar the co-ops from purchasing power from other sources.

But Holy Cross and three other of Colorado’s 22 co-ops do not have contracts with Tri-State. Instead, Holy Cross’ nonexclusive contract with Xcel allows it to also shop for power from the Pacific Northwest, wind power from a farm between Fort Collins and Cheyenne, and from microhydro plants such as Golec’s on Ruedi Creek.

“I think there is a national awareness that we can’t build just more and more generating plants, particularly for fossil fuels, because of the greenhouse gases they emit,” says Steve Casey, the spokesman for Holy Cross.

Rick Gilliam, senior energy policy advisor for Boulder-based Western Resource Advocates, says there is good reason to worry about more coal-fired plants. Some 30 to 35 are proposed for the West. They promise to be expensive and, even with new pollution controls, environmentally destructive.

The second reason Holy Cross stands out is because of its owners and consumers. The Roaring Fork Valley in particular is exceptional in its wealth and its devotion to environmental causes.

Telling was the response in 2004 to Colorado’s Amendment 37, which requires electrical utilities to provide progressively larger proportions of their power from wind, geothermal and other non-carbon sources. Statewide, 54 percent of voters favored the amendment, despite knowing it would result in higher electric bills. Pitkin County had the largest majority of support in the state, 82 percent; Eagle County registered 70 percent support, and Garfield had 59 percent.

Holy Cross has also been prodded by grass-roots groups, most notably Aspen-based Environment 2000, which in the mid-1990s began pushing for improved energy efficiency and, somewhat later, alternative energy sources. That effort resulted directly in the creation of the so-called Robin Hood tax on extravagant energy use in Pitkin County and the Community Office for Resource Efficiency, which steers those taxes into energy-conservation projects. CORE and Holy Cross work closely together.

But the green path for Holy Cross actually began in the 1980s, at the prodding of the Rocky Mountain Institute’s Amory Lovins. Earlier and more elaborately than most utilities, Holy Cross began offering energy audits at homes and businesses and offering energy-saving advice. Similarly, Holy Cross offers to help hotels and other large users tune their boilers and advise them when they’re shopping for new equipment.

This results in less demand for electricity, which flies in the face of the typical model for most businesses, whether they sell baseballs, T-shirts or haircuts. But when owners of the businesses are also the customers, saving energy is as good as selling it. Altogether, Holy Cross provided 300 to 350 energy audits last year to residential and commercial customers.

Holy Cross visits local fifth-grade science classes to explain how energy can be saved by, among other things, using compact fluorescent light bulbs. The thinking is that it’s better to begin influencing behavior at age 11 than at age 35.

The step into alternative sources began in 1999. In a survey of Holy Cross customers, 10 to 15 percent said they were willing to pay more for wind power. Some followed through on their promise, but until energy prices began skyrocketing last summer, only 5 percent had signed up. Even so, that made Holy Cross among the top five utilities for wind power in the nation.

Several years ago, Holy Cross expanded its program to provide incentives for small producers of hydroelectric, solar and wind power. Currently, Holy Cross buys wind power from one producer in the Silt-New Castle area. In addition to Golec, it also buys hydro power from the Aspen Skiing Co., from its new hydropower project on Snowmass’ Fanny Hill, and from the Mountain Chalet in Snowmass Village.

As well, 27 customers have photovoltaic solar collectors. These are nearly all small affairs, and only a few produce more power than what is needed inside a home.

Despite surging prices for energy from traditional sources, solar power remains a long-term investment. Installation costs roughly $10 per kilowatt, maybe $8 for those who do some of the work themselves. However, Holy Cross will rebate 20 percent of the cost, up to $10,000 per installation; for those customers in the Roaring Fork Valley, CORE will match the Holy Cross rebates. New federal tax credits further defray the investment, although it remains a 20-year payback.

Holy Cross continues to explore options, including converting the methane from coal mines into natural gas, and ground-source heat pumps.

Probably the most successful program at Holy Cross has been the rebate program available to customers who buy Energy Star-certified appliances. Energy-efficient appliances use less electricity, which makes them cheaper in the long run. The rebates ” $75 per refrigerator, for example, and $25 for a five-pack of compact fluorescents ” makes it a cinch. (Again, CORE provides further rebates to Roaring Fork Valley residents.)

Tom Cardamone and his wife, Jody, who built a house near Emma, between Basalt and Carbondale, are among those who took advantage of the Holy Cross rebates.

“Just about everything in my house ” plumbing fixtures, kitchen cabinets, even building materials ” is secondhand,” says Tom. ” But I decided that the cost of energy would make secondhand appliances expensive over the course of one, five or 10 years.”

On Aspen’s east side, Catherine Garland also got a $75 rebate, which she likened to a “chocolate after a meal ” it’s a nice added perk.” But she sees the greater advantage of rebates being the attention they direct to energy efficiency. “The American imprint is huge on the planet,” she says, “and the more we can do to lighten it, the better.”

If burning coal is cheap, it is expensive in broader ways. Hal Clark, an Aspen resident on the Holy Cross governing board, points to the cost to coal-miners themselves.

“I just read an article a few weeks ago about the cost of health insurance for coal miners, and the fact that so many of them got sick with black-lung disease. It’s really rather expensive, and it’s a cost that most people don’t think about,” he says.

If the threat of black lung has been addressed in modern mines, broader problems from fired electricity remain. The Roaring Fork Valley’s electricity, for example, comes partly from coal-burning power plants at Hayden and Craig. Sulfur dioxide and other emissions from those plants generally get blown eastward about 20 miles to the Park Range. Government scientists have found evidence that acid rain caused by that pollution was sterilizing lakes in that range, which includes the Zirkel Wilderness Area.

Court-ordered action resulting from a Sierra Club lawsuit forced plant owners, including Xcel Energy, to install emissions-reducing equipment. Tests show that the controls are working.

“The nation has been very successful in reducing sulfur dioxide emissions from coal-fired plants,” says CORE’s Udall. “The next enormous hurdle is carbon dioxide,” the most common greenhouse gas.

“People ask me what is the power source of the future,” says Clark. “I tell them coal for the next 20 to 30 years, because it is cheap and plentiful. I also think it will become more expensive as we add more pollution controls, but it will still be the cheapest.”

Alternative sources also have limitations. Ski lifts do not operate just when the wind blows, and few consumers would want to wait for sunshine in order to turn on their computers. While utilities can, and do, cut deals with major customers to help correlate peak demand with power supplies, there is little maneuverability in this equation of supply and demand. Fossil fuels are maneuverable: Coal plants can be cranked up within two days, and natural gas within minutes. Once created, electricity travels at 186,000 miles per second.

In the resort valleys, power consumption peaks in winter, and most specifically around New Year’s Eve. The ski companies are the largest consumers. Summer peaks are only half those of winter peaks. Demand is highest by day, lowest at night. Holy Cross power sources must be as large as the highest winter demand.

But within this mix Holy Cross sees more room for alternative sources. The utility has set a goal of 20 percent by the year 2015, double the minimum required by Amendment 37. It is investigating the potential for geothermal power, as well as burning beetle-killed trees for power in the Vail area.

In other words, there is plenty of room for entrepreneurs like Tom Golec. To create his 24-kilowatt hydropower plant on Ruedi Creek, Golec spent $65,000. Operating it is relatively easy, and he received a generous Holy Cross incentive. Still, he expects a seven-year payback. Normally, capitalists think more of a three- to five-year payback.

“It’s not like it’s an economic windfall for them,” say J. Kent Benham, chief executive officer of Holy Cross. “People who do these things do it for the most part because that’s where their hearts are.”

Golec, when pressed for brass tacks, admits as much. “For every kilowatt-hour of power I produce from a renewable, that’s 2 pounds less carbon dioxide that is going into the air from a coal-fired power plant,” he says.

While Golec’s air at an elevation of 8,700 feet in southwest Eagle County remained pristine and the snow still 2 feet deep in mid-April, he sees the world from a more global perspective, including one that now frets about greenhouse warming.

So does Holy Cross, says Benham. The world, he says, has become smaller. People understand that what happens in other countries affect us in our backyard. “And what happens in [local] backyards can affect somebody 1,000 miles away,” he adds.

In Carbondale, board member Tom Turnbull, a 40-year rancher, describes the mission of Holy Cross as a balancing act of financial and environmental responsibility. “We try to walk the talk as much as we can,” he says.

Turnbull notes that Holy Cross was one of only two co-ops in Colorado that endorsed Amendment 37. In fact, Holy Cross also bolted ” temporarily ” from the statewide group of rural electrical cooperatives several years ago in protest of lobbying policies.

“What might seem small acts of independence to you loom very large within the co-op world, which is opening up, but which is still insulated from outside pressures and changes,” says Paonia’s Marston.

“It is a sad commentary that investor-owned utilities as a whole seem much more willing to confront issues like global climate change than the co-ops as a whole.”