A Glimpse of Truth on the 16th Street Mall

  • Posted: May 29, 2019
  • Category: Blog
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Being a grandparent is to experience déjà vu all over again – a tip of the hat to Yogi (Berra not the Bear). As you gambol with the youngsters, vague memories swirl out of some dark closet. You hope these stirrings can guide your now unfamiliar behaviors but they come from so far in the past that they are but phantoms, wispy remembrance of rooms in a house long since crumbled into dusty ruins. We must learn the hard way, all over again, the ways of infants, toddlers and children. Once more we have our noses rubbed into the basic truths, unflattering as they are, of our true nature.

Being a grandparent means that life’s purpose has changed. You are no longer a captain of industry, a professional or even a bread winner, you are now just a stepping stone easing the path of your own in the endless march of the generations. The care and feeding of that future generation becomes the only remaining point to your continued existence. And it is with a certain melancholy that one begins to re-acquire the tradecraft.

Youngsters have lots of energy and short attention spans, much the opposite of Grandpa. Since childcare requires long hours spent in each other’s company bringing two opposite personalities into close and constant communion, there arises the need for activities amenable to both.

Perhaps one of the best of these activities is the game of “Peek-A Boo”, morphing into “Hide and Seek” as motor skills improve. Well-practiced grandpas, aficionados of the game as they are, know that hiding something in plain sight is the key to keeping the youngsters occupied while passing long periods of time with minimal effort for Grandpa.

Of course children’s games are the playing fields on which we practice to become adults, a truth instinctive to those seeking to shepherd us. Hiding in plain sight is a skill honed to perfection by those who lead the docile flocks into pastures prepared for them. But sometimes in a corollary to Murphy’s Law, the rubes stumble inadvertently on evidence of the obvious, hidden in the heaps of the mundane and virtuous.

Such was the case last week in the Denver Post. The front page, secure in the virtue of its righteous anger at discovered deviltry, documented the high cost of fueling RTD’s electric buses. RTD replaced their existing bus fleet on Denver’s 16th Street Mall two years ago to great acclaim and fanfare from the Boulder diocese. RTD (Rapid Transit District) is the regional operator of public transportation along Colorado’s Front Range. It seems that RTD, an artful combination of urban patronage and public service, is complaining about the high cost of operating their much praised electric buses.

As reported by the ever alert John Aguilar of the Denver Post, RTD’s electric buses cost 60% more (average fuel cost) than for the diesel fueled buses in their fleet. En passant, Mr. Aguilar is another of the “in crowd” on the staff of the Denver Post, a former Boulder journalism groupie. RTD complains that fuel costs for the diesel buses are $0.46/mile while the electric buses cost $0.73 per mile. Oh oh! There is villainy afoot here!! It’s so much fun to be a journalist, dedicated to truth!!

The insightful Mr. Aguilar ingenuously contrasts the cost for electrically powered buses to diesel powered buses. But in the interests of full disclosure, the Denver Post is a “responsible” news organization after all, the article mentions almost as an afterthought that the electrically powered buses actually replaced compressed natural gas (CNG) buses, not diesel powered buses. Since compressed natural gas is approximately 15% of the cost of diesel fuel, a more relevant comparison would have compared the fuel cost of the electric buses to that of the CNG fueled buses they replaced.

Using the fuel numbers cited by the Denver Post, one might consult the arcane mysteries of mathematics and engineering to make a stab at estimating fuel costs of CNG buses, the ones actually replaced by the electric ones. While these diabolical skills verge on heresy for those of the Boulder congregation such as Mr. Aguilar, it is admissible to unchurched Deplorables such as myself. Doing so gives an estimate of $0.07/mile for CNG buses. Of course that would result in the fuel cost for an electric bus on the order of ten times more (1,000 % vs 60%) than the CNG buses they replaced. Oh oh indeed! One comes face to face with the reason why neither the Denver Post nor RTD chose to make the more relevant comparison.

Those of us entertaining a certain bent of mind might fail to empathize with RTD’s management, choosing to smirk while muttering of chickens and roosts. But how can we not, in all honesty, extend our sympathy to those whose costs rise by an order of magnitude. What would you say if the cost of gasoline changed to $ 30/gallon almost overnight? Even a lapdog will nip at their masters when hungry enough.

The Church of Boulder, understandably upset, expressed its concern at this threat to the faith through the homilies of its official mouthpiece, The Denver Post, as articulated by Pastor Aguilar notes:

“(this) price disparity could slow the transit agency’s (RTD) embrace of zero-emission technology at a time when the state’s new Democratic governor is pushing to put more electric cars on the road”

Gadzooks!! How can this be!! Well, no one ever said that “Saving the Earth” was going to be cheap!! Whoops, my bad.

Well then, at least let it not be said that the Church of Boulder is not versed in the failures of its predecessors. Even as they snicker at the child-like naivety of those taking the story seriously, they understand the point of the Garden of Eden “fable”. The snake’s sly temptations led to expulsion from paradise. The lesson to be drawn here and now is that the thermodynamics and logistics of electricity, known to the pagans as dispatch, might ravage the Eden of the Eloi. Even journalists realize that the sensuous pleasures of artisanal organic sausage might be ruined by a visit to the back rooms of the sausage factory.

Dispatch is that ugly intrusion of reality into the architecture of the religious authorities’ dream world. Electrical power must be available 24/7/365. Through the ages, the creative energy of senior church officials has continually collided with the truth of Genesis third chapter.

One can imagine the Bishop of Paris screaming at the engineers building Notre Dame, “Where did those ugly support beams come from!! Get me new engineers!” People, those unwashed masses, damn them, want their air conditioning – even when the wind isn’t blowing! Why don’t they just go to the Aspen Institute like everyone else when it’s hot? The wine and cheese hors d’oeurves are excellent and it is so delightfully cool in the Aspen summertime.

The Denver Post cited RTD’s electrical costs being so high because of “demand charges”, obviously a euphemism for obscene profits and gouging the righteous customer. Capitalism is always fouling utopia’s water. In the article, “demand charges” are described as something required to:

“being ready to meet surges in demand (require) building and maintaining a robust system and grid that won’t fall short of customer needs.”

We return to the construction site on which the mighty cathedral of Notre Dame is rising. The humble engineer, with bowed head and halting words, contritely mumbles something about “roofs falling in” to the furious Bishop of Paris. In the real world, electrical power can’t be stored in any meaningful way or quantity. Electrical power must be generated and delivered as it is used.

As a result of this so far unavoidable fact of life, the economics of electricity have always been divided into two parts. The real world of electrical costs has two main components, energy and capacity.

Energy CostThe direct cost to generate the electricity, paid per kilowatt, covers the cost of fuel and some operations. It is only paid to the power generator for electricity actually generated.

Capacity – Basically the mortgage payment to retire the debt required to build and maintain. It is paid regardless of how much power is generated, but payment also requires proof of full capacity being available.

In my ill-fated career as a developer of power plants, these two numbers ruled life as I knew it. The operators of the power grid must add and subtract electrical generation as people turn on and off their air conditioners, charge their Tesla’s or burn the toast. As for RTD, their buses require high rates of electrical current for short periods of time while charging. As a result, the owner and operator of a power plant has no control over how many kilowatts of electricity he will actually produce, or when.

This uncertainty has become even more volatile in recent times as “renewable energy” generators have become larger and more common. “Renewable energy” generators have been excused from the realities of Dispatch. They come and go off the power grid as they please, not subject to Dispatch.

In extreme cases of power grid overload, power is fed into specially constructed ground beds where it is discharged into the ground, heating up earthworms to maintain grid stability until enough generation can be taken off-line. Everyone else on the power grid must accommodate “renewable energy” operations whether or not it is practical, economical or contractual. Wise engineers realize that the angry Bishop must sometimes be allowed to have his way.

People, whether rapacious capitalists or retirees holding utility bonds, are understandably hesitant to put their money into such a casino-like operation without some caveats. Thus an electrical system has Energy and Capacity payments to its power generators.

Understandably, the operators of the power grid seek to match their costs with their revenue. Lending long while borrowing short leads to unhappy outcomes. To this end they charge users for the kilowatts they actually use and for their pro-rata share of the cost of the mortgage payment. Instead of calling it a Capacity charge, they call it a Demand Payment.

Residential users are spared this complexity for various reasons. The metering equipment is relatively more expensive while the billing is complex and opaque. In places where utilities have tried to implement this type of billing, the outraged response of “consumer advocates” has been fierce. In most places and times, authorities have decided it unwise to irritate the sheep with the complexities of the wool market.

It is unavoidable to talk about electricity without bringing our local utility, Xcel, into the conversation. But that is a dicey conversation indeed, the mix of faith and temporal power. The Bishop of Paris could yell at the poor engineer, but in the end, he realized replacing engineers didn’t have any effect on the support beams. But it was a different conversation with the King of France who provided the money, the workmen and other necessaries for the construction of Notre Dame. Sometimes the ways of the world require the sacred to negotiate with the profane.

Public Service of Colorado (PSCC) once served the Front Range of Colorado. Now we have Xcel. PSCC was a member of that now quaint and seldom encountered utility, a utility focused on providing reliable and economical electrical power. But alas, PSCC was engulfed by a Borg simulacrum, Xcel.

Xcel has grown and prospered by catering to the needs of the now ascendant faith of Mother Earth, of which the Church of Boulder is an important diocese. Early on, Xcel understood, perhaps only dimly, that when faith contends with commerce in a highly regulated market place, bet on faith. Xcel has grown, engulfing old-fashioned utilities like PSCC, as a result of that understanding. Without exception, Xcel has stood on the podium, smiling, as various Moses-like figures have descended from a nearby mountain to give us details of the New Covenant.

The human heart is suspended between the world of the spirit and the world of the flesh. Mother Earth contends with our desire for air conditioning and we are torn between them. The Church of Boulder speaks of faith and of the requirements to worship properly. But it is necessary for someone to do the work after sermons are preached and commandments engraved into the stone tablets. The priestly class may rest from the hard work of creating a new world, taking their leisure among the many wine and cheese soirees of the Aspen Institute. But wind farms and roof top solar panels do not an electrical system make.

It may well be that the Millennium is soon to be upon us, but people still want their air conditioning today. And so there is a need for that French king, or for Xcel. It has been said, tongue in cheek, that England was built by warriors, while France was built by lawyers. Perhaps that is why church hierarchies have always found themself more comfortable with the French.

So too the Church of Boulder finds Xcel much more to their liking than Tri-State, the other major electrical utility serving the Rocky Mountain market. Tri-State fights tooth and claw to retain their coal fired power plants in the interests of their rate-payers. In contrast Xcel grandly retires one after another of its antiquated plants generously allowing triumphs of the faith to be proclaimed by various members of the Church’s hierarchy.

Of course, in the back rooms, reality must be accommodated. Compromises must be made. Check your catechism at the door, only adults are allowed back here. In the back room the needs of the faith can be accommodated to the realities of the market and the grid. Both parties might prosper if certain accommodations can be made. And so we have conversations about the necessaries –

 

“Yes, we will support the Governor’s (Bill Ritter) new Green Energy initiative. Love to!! By the way, we have this 750 MW super critical coal fired power plant down in Pueblo called Comanche 3 we want to build. Permits are darn near impossible to get right now. As you know the State of Kansas just refused to allow one like this to be built. You’ll help, great!!”

“Yes, we will retire those antiquated coal fired power units at Arapahoe, Cherokee and Zuni stations. But we will have to replace them with much larger new combined cycle natural gas units. Oh, another thing. We need to bring in new high pressure gas pipelines to serve these inner city units. You’ll help with costs, permits and the Public Service Commission? Great!!”

“Wow, that’s quite a laundry list of “Green Initiatives” you’d like us to support in the newspapers, in the legislature and before the Public Utilities Commission. You can be sure we’ll have your back every step of the way!!! I hate to bring this up right now, but Black Hills Energy is really taking market share away from us right now, mostly unfair competition in light of all we’re doing for the cause. Do you think you can do anything to give us some help?”

“When the Denver Post’s Mr. Aguilar shows up and asks what we’re going to do about “demand charges” for electric vehicles? No problem, we know John is a friend and understand the need to reassure the faithful. We’ll “work on finding a way to alleviate the burden of demand charges as it applies to electric vehicles”. You understand that it might take awhile of course.”

“Oh wait, our private jet is still warming up and we have a minute before we take off for Aspen. We’d like your support before the Public Utilities Commission. We’re asking for a higher rate of return for all these new “green initiatives”. Maybe a further \relaxation on permitting requirements? Great!! We knew you’d understand.”

 

 

3 Responses to “A Glimpse of Truth on the 16th Street Mall”

  1. Bill Heermann says:

    Lovely and truthful article. For those non-power Deplorables, most will not remember Mr. Ritter’s actions and the tremendous cost to the consumers. They are unable to link the replacement CTs, to the gas line, to the demo of the plants, to the dual set of generating assets required when we are using those renewables. Most would find another utility’s generating assets (Black Hills CTs) sitting on an Excel site as odd (Arapahoe). Or how about Excel enticing Calpine to build a co-gen/IPP plant at the Rocky Mountain Energy Park so Excel could buy power at a higher cost then their own cost of production.
    Renewable energy is free, isn’t it? Take a look at the cost of constructing the 600 mw Rush Creek wind farm. When I last looked the construction cost was ~$1.75 mm per mw, just a little less than double Commanche 3’s cost. Now that wind farm cost included the HV tie lines to the distant substation, because the permit requested 95,000 acres, or about 315 acres per tower. It is a little tough to locate that many towers at Arapahoe and Zuni combined, but they do have under utilized substations that might be for sale. And of course I elected to ignore the cost of the standby generating assets required when mother nature is out of breath. But we can thank the EPA for changing its regs to allow 4 times more eagles to be killed so Excel could build those lovely farms and not be hit with EPA compliance fines.
    But Mr. Ritter’s actions gave Excel and Mr. Mills a tremendous amount of capital to spend, justifying the new toys Excel and the Boulder parish desired built. Maintenance costs require tight management as they can’t be added into the rate base, but capital costs go in and the public pays the bill. But consumers shouldn’t worry! The newest administration pushed through what the voters turned down in November of 2018, aka SB 181. As soon as the drilling permits are exhausted we will be required to keep our natural gas in the ground, allowing us to buy natural gas from out of state producers.
    I am sure it all ties together in some form of master plan.

  2. Stephen Westfall says:

    Best BLOG to date, Bill. After seeing 10 Teslas lined up at the recharging station at Park Meadows Mall recently, the question crossed my mind about the cost/mile of electric vehicles, an honest comparison that I have never seen. Having conversations with sanctimonious electric car owners has rendered no meaningful information, only planet-saving pats on their own backs. Even though I am a huge internal-combustion car fan, I also admire the performance of electrical-powered vehicles, especially Teslas, but if economy or air quality is the driver’s motive I feel that it is misplaced incentive.

  3. Jeff Esbenshade says:

    What ever happen to all of above? Germany closed all of the above and went to all

    wind power and now has highest cost per kw in Europe.

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