August 5, 2006
You might call it faith-based environmentalism of the global variety.
Vail Resorts announced this week it would purchase enough “renewable energy credits” from a privately held company to cover 152,000 megawatt hours of wind energy, enough to cover its entire energy use.
But the contract between Vail Resorts and Renewable Choice Energy of Boulder doesn’t mean the power the company uses will in fact be generated by wind. Vail Resorts, or at least its facilities in the namesake valley, will still be getting its power from Glenwood- Springs based Holy Cross Energy. It’s a rural electric cooperative which in turn buys its power from Xcel Energy.
About 98 percent of Xcel’s power is generated by natural gas and coal.
We are mystified as to why a publicly held company would voluntarily pay more for electricity than it has to. It is under no state or federal mandate to pay more. But if the move makes the board of directors feel good, or if it produces more business from customers who admire their alleged dedication to the environment, then it’s presumably a defensible deal.
The stockholders apparently like the move; the Vail Resorts stock price gained over $1 during the week to about $36.
Holy Cross (and Vail Resort’s other utilities) will continue to to be paid what they’re always paid by the company, no more, no less.
Nor will the utilities share in whatever extra cash – the amount wasn’t disclosed – Vail is shelling out for the renewable energy credits, sometimes called “green tags.” The money is forwarded to wind producers around the country by Renewable Choice, which claims to have issued 1 billion KWH of credits over the past six years. It keeps an undisclosed percentage for its work as middleman.
“When a home or a business buys wind energy credits from us, we ensure that a wind farm will add that much electricity to the grid for that customer,” Renewable Choice’s Quayle Hodek told News reporter Gargi Chakrabarty.
And who is supposed to make sure that all these purchases are actually made and that the same wind-generated power isn’t sold over and over? A private San Francisco company called Green-e. The process isn’t regulated by government.
Vail Resorts is buying an “environmental attribute,” not energy, says Kent Benham of Holy Cross.
Only time will tell whether the resort will be getting its money’s worth.
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