Anschutz Corp., known for the Staples Center, looks to set up the largest wind generation facility in the nation – in a state that wouldn’t use a kilowatt of it.
RAWLINS, Wyo. – A relentless wind howls day after day across this high desert, pouring through a low gap on the Continental Divide.
“This is one of the windiest places in the nation,” screams Bill Miller above the din of gusting air.
Miller, a wiry man who spent much of his career in the oil and gas business, is in charge of building a massive wind farm on a cattle ranch owned by Anschutz Corp., better known in Los Angeles as co-owner of Staples Center.
It would produce as much power as three nuclear reactors, making it the largest wind-generation facility in the nation, if not the world.
But not a single kilowatt would be consumed in Wyoming. Instead, it would feed a new 750-mile transmission line to the California grid, where the electricity would help California’s crusade against global warming, while much of Wyoming continues to rely on the fuel that is one of the big contributors to climate change: coal.
“The enviros look at us and wonder what we are all about,” Miller said. “We got into renewables because we think it is a good business.”
The Anschutz sales pitch is simple: Its power will be plentiful, reliable and cheap, not to mention green – just what California needs as it faces an era of escalating electricity prices.
But a green energy marriage between Wyoming and California would be a study in stark contrasts, a household of mixed-up politics.
Wyoming residents enjoy the cheapest electricity prices in the nation, thanks to low-cost power from coal-fired plants near vast surface mines in the Powder River Basin. California, which has all but phased out coal power and has the nation’s most aggressive renewable energy laws, has close to the highest prices, according to U.S. Energy Department data. State law requires that one-third of the state’s power come from alternative energy by 2020.
Wyoming has no legal requirement for renewable energy, and Republican Gov. Matt Mead’s staff says such a mandate would be politically inconceivable in such a conservative stronghold. Wyoming recently became the first state to tax renewable energy.
Political differences, Wyoming officials say, should not get in the way of a good business deal.
Many in California favor buying locally generated, small-scale renewable power, saying it supports state jobs, avoids the environmental impact of building high-voltage transmission systems, provides greater economic benefits and gives the state more direct control of its power grid.
But developers of the $8-billion wind farm here, scheduled to start construction next year, say they can generate and ship wind power to California more cheaply than the state can generate its own.
The wind is so strong and so consistent in Rawlins – even the mayor admits “it wears on people” – that Miller says the wind farm can deliver power across four states and still beat the price of California’s own renewable power projects by a wide margin. If Anschutz’s meteorological and engineering research is correct, the Rawlins wind farm will undercut the power prices from some California renewable energy installations by half.
“It is understandable that California wants to build their own generation facilities, but it makes a lot of sense for California rate payers to consider Wyoming power,” said Loyd Drain, executive director of the Wyoming Infrastructure Authority. “We are not talking about Wyoming wins and California loses.”
Drain, formerly a Texas lawyer, has worked his charm on California officials, meeting with dozens of the state’s top regulators. But the idea of buying green energy from a state that burns coal is politically unpalatable for some California politicians, and many regulatory officials are suspicious about the idea.
After attending a conference on Wyoming wind power, Edward Randolph, energy division chief at the California Public Utilities Commission, observed: “All they wanted to talk about was selling coal power to the coastal states.” Randolph wonders whether buying wind from a state that burns so much coal is really accomplishing the climate change goals California has set.
“If we are taking renewable power from Wyoming, while they burn coal, then you aren’t accomplishing very much,” said Severin Borenstein, a UC Berkeley expert on the California electricity market.
But Anschutz has played a careful political hand. The company has obtained labor agreements with major California unions, including those representing electrical workers and operating engineers, who hope to get skilled jobs building the wind farm and transmission lines. The company plans to negotiate sales agreements with California utilities after all its regulatory hurdles are passed.
At the same time, state and private utility officials in California are worried about a potential consumer backlash against other green energy policies that may be pushing up electricity prices. Cheap power from Wyoming, they argue, could help offset coming price increases that also will likely result from the loss of the San Onofre nuclear power plant, the planned shutdown of other coastal power plants and likely increases in the cost of natural gas.
A study released recently by San Francisco-based Energy + Environmental Economics, a respected consultant in renewable power, projected the cost of electricity in California would jump 27% over the next 15 years, not counting inflation.
The prognosis for higher prices is supported by experts at UC Berkeley and Stanford University, though the state Public Utilities Commission said an internal study indicated that price hikes can be held to the rate of future inflation.
“It is incumbent for California to find the cheapest way to do this,” Ren Orans, founder of the San Francisco consulting company, said of the state’s renewable energy mandate. One way is to integrate renewable resources across the Western U.S., as far away as Wyoming and Colorado.
What is not under dispute is that coal power is cheaper than wind power, as long as the cost of pollution is not considered. Wyoming consumers paid an average of 7.4 cents per kilowatt-hour for electricity last summer, for example, while in California, rates average 15.98 cents per kilowatt-hour.
Wyoming officials make no apologies for their cheap power or where it comes from. “I’m not green,” Rawlins Mayor Kenneth Klouda said. But he said the wind farm could stoke the local economy. And Californians, if they don’t avail themselves of Wyoming power, “could end up freezing in the dark.”
One thing both states agree on is that Wyoming offers the economies of scale. What Anschutz is planning in Rawlins would not be possible anywhere in California. The wind farm would be located on the company’s 500-square-mile ranch, so big that it stretches to the treeless Wyoming horizon. The entire city of Los Angeles could fit inside.
Wyoming also offers advantages of timing. In California, the wind blows hardest at night, when electricity demand is low. Just the opposite is true here, where the wind starts picking up after sunrise and keeps growing in intensity, meaning it could supply power in the late afternoon, when California’s summer air conditioning loads are highest.
Anschutz plans to install 1,000 turbines in two phases. The company has many of the environmental permits it needs for the wind farm, lacking only a federal permit that would allow for the deaths of eagles if they accidentally flew into a turbine. The turbines would connect to a high-voltage power line, dubbed the TransWest Express, which would extend almost to Hoover Dam, where it would connect into the California electricity grid. Anschutz officials hope the power line, which potentially would be built jointly with the Western Area Power Administration, part of the Energy Department, will get regulatory approval later this year.
The connection near Hoover Dam means that the Wyoming wind energy counts the same as renewable power generated in California in terms of California’s renewable energy law, a legal quirk that the company has carefully studied. Even after all the wind turbines are put in place, they would occupy a small footprint of the ranch.
Anschutz said the plan is to continue routine operations on the ranch, where up to 5,000 head of cattle can graze.
“The cattle don’t mind the wind turbines at all,” Miller said.
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