Renewable Power Customers Get Lower Winter Bills

Many electric utilities allow consumers to buy power specifically from renewable sources. Usually, that means customers pay a little more. But consumers in Denver who made the renewable power requests are getting a nice surprise this winter — their bills will be lower than those who rely on coal and gas.

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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

Don't look now, but you can save the earth and save a buck at the same time. At least you can in some places. Take Denver. There, utility customers who signed up for a wind energy program will pay less to heat their homes this winter than their neighbors. NPR's Jeff Brady has the story.

JEFF BRADY reporting:

It's not that electricity from windmills has become so cheap, but electricity generated from burning coal and natural gas has become so expensive. Charles Acquard heads the National Association of State Utility Consumer Advocates.

Mr. CHARLES ACQUARD (National Association of State Utility Consumer Advocates): A lot of consumers are going to be just shocked by the energy bills that they receive this winter and some, who are more the low-income customers, may have to choose between paying the energy bill and keeping warm in the winter and food.

BRADY: Hurricanes Katrina and Rita disrupted already tight natural gas supplies. That pushed up prices, and it will take years before drillers can bring more gas to market. What's less well-known is that coal prices also are on the rise. They've more than doubled in the past three years. Rich Bonskowski monitors coal prices for the US Department of Energy. He says the increase is due to a number of factors. Among them, China is using a lot more coal these days, and production costs have gone up. Bonskowski says none of these problems can be fixed easily, and so coal prices will remain high.

Mr. RICH BONSKOWSKI (US Department of Energy): In the long term they may level off again. It usually happens that way, but for right now I think we've established a new higher-level baseline than we've had before.

BRADY: Coal and natural gas prices created an opportunity for the wind power industry. The cost of the fuel for windmills has remained the same, free. Most of the expense is in construction on blustery hilltops. And once a project is finished, the costs are pretty much set for the 20- or 30-year life of the windmills. So what doesn't everyone just switch to wind power? Because there's not enough to go around.

In Denver, the local utility, Xcel Energy, doesn't have any more wind power to sell. New customers are put on a waiting list. Randall Swisher, with the American Wind Energy Association, says more windmills are being built every day.

Mr. RANDALL SWISHER (American Wind Energy Association): We expect, you know, wind should provide, you know, at least 15 percent of US electricity over a period of decades. You know, we're very, very small right now, about 1/2 of 1 percent, but growing very rapidly.

BRADY: But after more windmills are built, customers may find much of the price benefit of wind power is gone, because when coal and gas power is expensive, companies that build wind projects may want to take advantage of those higher prices on the open market. Randall Swisher says he's already seeing a trend.

Mr. SWISHER: Well, sure, and one of the things that a number of our members are considering are building what we call merchant plants where rather than having a contract with the utility, you just sell the power into the market and whatever the market is paying that day is what you get paid.

BRADY: That may help the bottom lines of companies like Siemens and General Electric that have gotten into the wind energy business, but for utility customers the future appears to hold nothing but higher prices. Jeff Brady, NPR News, Denver.

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