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Randall Swisher

There's Cheap Energy Blowing in the Wind

February 25, 2001|Jim Crogan | Jim Crogan has written for LA Weekly, Newsweek and Time magazine

If there's a silver lining in California's disastrous experiment with energy deregulation, it may be heightened public interest in expanding sources of clean, renewable energy. Wind is one such source. Although wind-energy producers have taken it on the financial chin during the state's energy crisis, Randall Swisher still sees a bright future for this "green power."

As executive director of the American Wind Energy Assn., a Washington-based lobbying group, Swisher represents some 700 wind-powered electricity producers, utilities, wind-turbine manufacturers, law firms and academics. Formed in 1974, the association promotes low-cost wind technology, wind-related legislation, the nationwide restructuring of the electricity industry and investment into research and development.

In 1978, Congress passed the Public Utility Regulatory Policies Act requiring utilities to buy some of their power from alternative and renewable energy sources. During the 1990s, wind became the world's fastest-growing renewable energy source, expanding at average annual rates ranging from 22.6% to 30%. By mid-1999, U.S. capacity reached nearly 2,500 megawatts.

The wind industry, now a global concern, really began in California. The state leads the nation in wind-generating capacity with 1,646 megawatts, even though the AWEA ranks California 17th in terms of wind-energy potential (North Dakota is No. 1). Last month, California approved more than 400 megawatts of new wind-generating capacity. But 2,000 megawatts, Swisher insists, is still far short of the state's current projected capacity of 5,000 megawatts, enough to light more than 1.5 million homes.

Swisher has served as AWEA's executive director since 1989. Before that, he worked as the legislative representative for the American Public Power Assn. and as energy program director for the National Assn. of Counties. Swisher's involvement with renewable energy dates to 1975, when he was a staff member of the House Interior Committee's subcommittee on energy and water.

What wind-energy producers need now, says Swisher, are an extension of the federal tax credit for wind production and a renewable portfolios standard requiring that a certain percentage of the electricity produced in the U.S. come from renewable energy sources. About 11% of California's electricity comes from such sources.

Swisher lives in Silver Springs, Md.


Question: How does the cost of wind-generated electricity compare to the cost of electricity produced by natural-gas-powered plants?

Answer: It is cheaper today to generate electricity from a new wind plant than a new gas plant. And it is significantly cheaper to generate electricity from modern wind technology, compared with the technology that was installed in California in the 1980s. Natural-gas-generated electricity costs between 15 and 20 cents a kilowatt hour in California, compared with 3 to 6 cents for wind.

Q: It's been reported that "green energy" producers in California have been severely hurt by the state's energy crisis, even though the higher prices they receive are in line with current natural gas costs. Is that true?

A: Let me clarify a couple of things. You are talking about the contract price--what wind generators are supposed to be paid. Until recently, that payment was somewhat higher than the cost of natural gas.

Q: The state's biggest utilities, Southern California Edison and Pacific Gas & Electric, have not been paying wind-energy producers for their power, right?

A: Not since November.

Q: And the utilities are trying to negotiate a deal to cut the price they owe from 12 to 15 cents a kilowatt hour to about 7 cents?

A: The price that wind generators have been getting has been tied to the cost of natural gas. Two years ago, when the price of natural gas was very low and wind companies were struggling to survive, that connection didn't seem to concern the big utilities. Now that the price of gas has gone up something like 600%, they are looking to change the terms of the deal.

Q: Why were wind energy costs tied to the price of natural gas?

A: It wasn't just wind. It was all independent energy generators. The general policy guiding regulators in setting a price is called "avoided cost." In other words, by purchasing energy from independent generators, the utilities are avoiding the costs of either generating their own electricity or purchasing it on the open market. Certainly, no one expected that the cost of natural gas would go up 600%.

Q: Yet, it is being reported that alternative energy sources, such as wind, are more expensive than natural gas.

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