By WILBUR WOOD

For The Outpost

In June 1974 nine people got together in Billings and formed AERO, Montana’s Alternative Energy Resources Organization (Elizabeth Wood and I were two of them), one of the first nonprofit, citizen membership organizations on the planet advocating a shift from fossil and radioactive fuels to clean renewable forms of energy.

The time was right: It was just months after the first “oil shock” created by OPEC, the Organization of Petroleum Exporting Countries. Consumers in the United States had been paying between 25 cents and 35 cents for a gallon of regular gasoline, and countries like Saudi Arabia aspired to get a higher price for their product, which had been greasing the wheels (literally) of every “developed” industrial economy on the planet.

So OPEC turned off the spigot to achieve this goal, and also to make a point about who really was in control. Petroleum production in the United States had peaked by 1973, and even increased oil imports from non-OPEC nations like Mexico could not forestall long lines at gasoline pumps, handwritten signs reading “Maximum 5 gallons” or “Sorry, out of gas” and prices that suddenly jumped two to four times higher than anyone expected.

It was a wake-up call about where our energy was coming from. At the same time people in Montana and Wyoming were waking up to a plan to turn our region into a National Sacrifice Area – this was the term used in a document called “The North Central Power Study” authored by federal agencies acting in collusion with coal companies, whose plan was to stripmine the land and send low sulfur sub-bituminous coal to 30 or 40 new thermal generating plants stretching south from Eastern Montana along the Bighorn Mountains into Wyoming.

"Why not set up wind generators all over these systems and let farmers and ranchers pay them off by feeding power into their own grid?"

Mountains are a source of water, and thermal generating plants require a lot of water, and if our clear skies filled with smoke, this was just part of the sacrifice needed to send electricity east and west and keep the skyscrapers, parking lots and suburbs lit up and humming.

AERO members not only favored energy from the sun, the wind, flowing water, growing plants, and Earth’s own heat, but we favored (we still favor) decentralized energy systems, more local control, more local responsibility.  We naturally thought that an inherently decentralized system, the rural electric cooperatives, set up during the 1930s and ’40s to wheel cheap power from federal dams into the countryside, would be a place to find allies.

Why not set up wind generators all over these systems and let farmers and ranchers pay them off by feeding power into their own grid? Why not devote some of that money to weatherizing houses and barns, or installing solar water pre-heating systems?

It turns out that many co-op members recalled fiddling around with machines like the Jacobs Wind Chargers, good machines for that time, but you had to keep tending batteries if you wanted to store power for when the wind wasn’t blowing. Of course, the co-op’s grid now could become your storage system, but even so, co-op boards and managers saw their groups as buying clubs. They were consumers, not producers, of electricity.

Fast-forward to the early 2000s when many Montana co-ops east of the Rockies faced losing their cheap federal hydropower contracts in a few years. Five of these RECs – Yellowstone Valley, Beartooth, Fergus, Tongue River and Yellowstone – formed a new entity that would buy – or produce – power for all five co-ops. It was called the Southern Montana Electrical Generating and Transmission Cooperative, or SME.

SME did not choose the decentralized option - wind generators all over their system. It chose a centralized coal-fired power plant. Since water was needed, and since the plant was far bigger than required to meet the demands of co-op members, SME enlisted the city of Great Falls, through its municipal utility, Electric City Power, to join.

Great Falls brought two things to the table: (1) potential electricity consumers to consume some of the excess power of this facility – that is, if the city’s power supplier, NorthWestern Energy (NWE) could be supplanted – and (2) the city’s all-important water rights to the Missouri River. The power plant, called the Highwood Generating Station, would be located downstream from Great Falls.

But this is not a story about the demise of a 250-megawatt coal plant. Let us just say that financing, both federal and private, fell through, and today, five years and $10 million later, SME’s new plan is to build a much smaller natural gas power plant: 40 megawatts initially, with 40 to 80 MW projected for later. However, co-op electric rates have risen steeply to cover the initial investment, and now only four co-ops are on board. Yellowstone Valley Electric Co-op, which surrounds the city of Billings, has jumped off this ship. So, probably, has Great Falls. Many members of the other three co-ops are restive.

Rural electric co-ops around the country are moving, gradually, toward the idea that energy efficiency (to cut demand) and “green” energy (to replace lost supply) could work for them, but this awareness is surfacing only dimly in the pages of “Rural Montana,” the monthly magazine of the Montana Electric Cooperative Association.

“Rural Montana” continues to downplay renewable energy by publishing cost charts for various forms of electrical generation; these blatantly understate the costs of coal and nuclear energy, overstate the costs of wind and other renewable sources, and oversimplify the entire subject. In the January 2010 issue, in a piece called “Greening the future will have its cost” author Megan McKoy offers a chart on “the price of new generation” taking into account, she says, “plant construction, maintenance, fuel, and operating costs”; here, in ascending order, is the “cents per kilowatt hours (kWh) produced” for nine different energy sources:

There are many things to question about these figures. What kind of new hydropower are we talking about? New small-scale hydro facilities might approach that price, and existing large dams certainly approach that price, but it is almost unthinkable that a large dam like the private dams at Great Falls or government dams like Fort Peck, Hungry Horse or Yellowtail could even be considered these days. Too many impacts. Too expensive.

Coal? Existing, paid-off coal plants might meet that price, but not new ones. By my calculations, the costs of the proposed Highwood coal plant soared well beyond 6.6 cents per kilowatt hour, even without including “externalized” costs like mining, transporting, and polluting.

Ignoring the externalized costs of nuclear generation (including mining and refining of uranium and isolating radioactive wastes such as plutonium from the biosphere for up to 2 million years) as well as ignoring massive federal subsidies also skew the true cost of nuclear power so that 6.7 cents a kilowatt hour is laughable.

Natural gas is the cleanest of the fossil fuels, and plants are cheaper to build. But it still pollutes and still uses a lot of water (as do coal and nuclear) and since it is a finite fuel, its price over time can only rise.

As for the renewable sources, geothermal and biomass energy come in many forms, and assigning one price for them is misleading.

Solar thermal is best left for space or water heating, not boiling water to steam to turn turbines, while the cost of direct solar electric (photovoltaics) - though falling rapidly - still makes it prohibitive unless it is (a) installed in locations remote from power lines or (b) significantly subsidized.

That brings us to wind. The 11 cent figure baffles me. Yes, wind is intermittent and needs to be “firmed” (backed up) by other sources - unless a storage method (batteries, pumped water storage) is integrated. But NorthWestern Energy is not paying anything close to 11 cents per kWh for wind electricity, as we’ll see below.

A couple months ago a friend of mine attended an NWE presentation by Debbie Singer on what the utility, which serves 330,000 Montana customers, pays either for electricity or for energy conservation to avoid buying electricity. He took notes. Singer used dollars per megawatt hour figures, but I’ll convert this to cents per kilowatt hour.

Peak power on the spot market (a variety of sources) - 12.5

Judith Gap (windpower) -  4.8

PPL-Montana - 4.6

Conservation - 2.0

If you look at the highest and lowest figures, clearly it is in the best interest of both NWE and its customers to avoid having to pay for peak power, in whatever form (often it is natural gas), by investing in energy efficiency.

The two middle figures need explaining. Judith Gap is a wind farm, and NWE is paying less than half of the “Rural Montana” figure of 11 cents for power generated there. In fact, the Judith Gap price is barely above the PPL-Montana price.

So what does PPL-Montana’s power consist of? In 1999, this Allentown, Pa.-based corporation bought most of Montana Power Co.’s dams and MPC’s 25 percent interest in the Colstrip power plants. (NWE later bought MPC’s transmission system.) Of PPL’s 1280 megawatts of capacity; approximately 40 percent is coal and 60 percent is hydro.

One can never know exactly what percentage is coming from what source - an electron is an electron - but since hydro is considerably cheaper than coal (“Rural Montana” says it is two cents per kWh cheaper), it stands to reason that NWE actually is paying more for PPL coal power than it is paying for Judith Gap wind.

The question of why both NWE and the rural electric co-ops are balking at investing in small scale windpower, and slow to invest in energy conservation, will be taken up in a future article. For starters, however, it’s useful to get real about energy costs.