Green Energy: What's it Worth To Ya?

I've delighted in some of Patricia Chambers' reporting in the past: her preview before this year's election was quite good, for example. In the case of her Dec. 7 Taos News article, "Just how 'green' is Taos County?" though, I think she would have done better to include some economic and political analysis along with the straight reporting of the Kit Carson co-op meeting and the speech of its CEO. So, I'll provide some:

First, from the point of view of the consumer, who's getting browbeaten here, the key factor, mentioned almost in passing, is that consumers have to pay extra for electricity from Green sources. The amount, $.0125 per kwh, is beside the point. Essentially, the word around the street is that this is a "stupid tax" and people don't want any part of it.

"Stupid tax"--you may have heard the term used more for the public lotteries, and, less frequently, in relation to casino gambling. The difference between those activities--which attract hundreds of millions in the U.S.--and this one is that those forms of entertainment at least give you a moment of pulse-quickening thrill as they take your money. Green energy offers no extra juice.

If only they gave you something for signing up, some more would buy. Maybe a bumper sticker that says, "I Pay More for My Electricity For Your Benefit" would do the trick more than just the current mere Feeling That You Did the Right Thing. That, the normal electricity cost, and $.0125 per kwh will keep your lights burning (and they will seem to have a greener tint).

The bumper-sticker handout is a short-run, small-thinking approach, though. The real ticket is to make the price of Green Energy the same as the other source. Who wouldn't choose it, then? And once you had the mass interest in the product, it would work financially.

Which brings us to the second economic perspective, that of the enterprise. The key concept to consider here is "sunk cost". Basically, Kit Carson's heirs have invested most of the dough already in building the system to track the separate revenue from Green energy and the separate sourcing stream of energy. Which means that the enterprise has reason to lower its prices for the product now that it didn't have when the project was on the drawing board. They tried to get people to pay more for it; that didn't work. The next step is to see how many they can get to sign up by making public appeals, before they reduce the price, or if that doesn't work, abandon the project.

In all fairness, though, the sequence is the correct one for the enterprise, and it's right that they should be making the public appeals at this current stage. They have no doubt resolved to hold the line for a while longer before they take the plunge and bring the price to par, or perhaps they're merely waiting for the right moment.

Indeed, why give up that line before they have tried the third route, that of getting public policy support for the endeavor? Essentially, Kit Carson's next move should be to appeal to the government (through any lobby connections they have, but also through letter-writing campaigns from their many customers) for a subidy which will allow them to price at parity with the commercially-sourced "organic, but not green" fossil fuel-burning electricity. I'd suggest the federal route, going to Udall and Domenici, with the state channel as strategy 3B.

I would say that each political channel holds promise. I don't pretend to know the legal complications for the interactions between feds, the state, and our own rural electric co-operative. I think there's plenty of precedent for subsidies, though, and politically, it's a winner: to any elected official, it has the appearance of Votes on a Platter. That might not matter to Domenici, if he's secretly harboring ambitions of retirement, but otherwise he should love this one. Udall and Bingaman should be slam-dunks, though their support would not be sufficient without that of Ol' Pete. Richardson would also like it, but he might encounter a problem with the jealousy of state legislators from other parts of the state.

As one who rates the reduction of our climate-changing effects from generating greenhouse gases and burning fossil fuels to be at the absolute head of the list of our long-term priorities, I would welcome such a government investment decision. But sign up to pay extra for nothing? No, not even I would do that.