CPS alternative program: Wind blows savings to customers

07/13/2008

By Colin McDonald
Express-News

For the first time, the rising cost of natural gas has made electricity from wind farms cheaper for CPS customers than power from gas plants.

Only two cities in Bexar County have signed up for CPS's Windtricity program, and both say they did so for the reason of supporting domestically produced clean energy.

But now their critics - who argued the decisions were a waste of taxpayer money - are paying 10 percent to 20 percent more for their power.

"It kind of takes the wind out of their sails," said Bill Kiel a city councilman for Alamo Heights, which signed up for the program in June, following the city of Helotes, which agreed to the program in May.

Last summer, gas cost $7 per thousand cubic feet. This summer the cost is expected to average at least $11, according to CPS.

In May, the utility warned customers that their monthly utility bill would be $38 more if they used the average of 1,600 kilowatt-hours a month. Also at that time, the company billed Windtricity as a "premium service," noting it would cost more but was a tangible way for customers to financially support efforts to reduce carbon emissions and stop or delay the construction of new power plants.

The privilege, CPS said, to aid the Desert Sky and Cottonwood Creek wind farms in West Texas was expected to cost customers between 10 percent and 20 percent more per month if they chose to buy all of their energy through the program.

In June, the price of fuel turned that premium into a discount.

"This happens only in months with extremely high fuel costs, which of course is exactly what has happened this month and last," wrote CPS promotions manager Justin Chamberlain in an e-mail. "This situation is not expected to continue."

Kiel, who spent 33 years conducting and overseeing natural gas exploration for Shell Oil Co., disagrees.

As soon as demand for gas in the Southeast begins to diminish with people turning off their air conditioners, those in the Northeast begin to turn on their heaters, causing gas prices to soar to the highest levels of the year, he explained.

"I expect them to be right back up or higher later this year," he said

When he signed up in April, Kiel figured the cost difference between natural gas and wind would eventually be minimal as more wind farms were built and the price of natural gas continued to rise. But even he was surprised by how quickly his decision paid off.

When he signed up, his April bill was $28.52, more than if he had stayed with the standard rate. In May, he paid $6.27 more. In June, the capacitor of his air conditioner went out and he used 4,697 kilowatt-hours, almost four times what he usually uses. But because he had signed up for Windtricity, he paid $27.95 less.

"It seemed like a good bet to me," he said.

Kiel was able to convince his fellow council members to unanimously vote in favor of the City of Alamo Heights' purchase of 100 percent Windtricity. The mayor and council members expressed concern the program was a "gimmick" to get them to pay more for the same thing. But the city, like any customer, could pull out of the program and return to the standard rate at any time.

Helotes agreed to the program as part of its campaign to distinguish itself as an environmentally progressive place to live and work. The two biggest selling points for the council was the promotion CPS promised to do for the city as its first municipal partner and the validity the carbon free power would give to the city's claim, said Rick Schroder, the city's Economic Development Specialist.

"A third part is we are actually paying less," he said. "So for right now it is a win, win, win."

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