California or Bust: the Wind Energy Rush of 99?

By Paul Gipe

The following is an editorial (leader) which appeared in Windpower Monthly. Since this editorial appeared the Federal Energy Regulatory Commission disallowed California’s bids and all the bids were thrown out. By mid 1996 none of the winning bids had been reinstituted.

 In 1849 gold was discovered at Sutter’s Mill near Sacramento. A speculative fervor soon swept the country and otherwise sane people flooded the state seeking their fortunes. Most failed miserably, but some went on to create enduring institutions that have influenced California’s colorful history to this day.

 During the 1980s the great wind rush drew entrepreneurs from around the world to California’s wind-swept passes. In Tehachapi’s bars you were as likely to hear Danish or German as American, or to see as many Saturday night cowboys in clogs as in Western boots. Again many failed and their mistakes still litter the countryside. But some succeeded, and those that did have created an industry chomping at the bit of expansion.

 The announcement of wind’s apparent success in California bidding has raised the specter of a second wave of wind development that could add another 2 TWh of generation per year to California’s 2.8 TWh production. California alone could add as much capacity per year during the “rush of 99” as is now being installed across the entire European continent.

But before you saddle your horse and join the stampede to find your fortune in California’s golden hills, beware. It takes men and women of steel to play the bidding game. The bets on new technology, on new permits, and on long-term financing are risky. The stakes are high too. A false move–a card mislaid–could spell a showdown in the street, and only those with the fastest attorneys will survive. One shootout to watch closely pits an upstart “clever bidder” against the state’s heavily-armed utilities at the PUC’s corral in San Francisco. The outcome could well determine who gets what capacity and at what price.

 Long before the dust settles from bidding (SCE has suspended the process in its area. See the article by Ros Davidson in this issue), some brokers, the card sharks of the investment world, are already strutting down the boardwalk announcing the winners and flogging their in-house wind stock. Other professional gamblers, many not seen since the halcyon days of the early 1980s, are pouring into town. Contrary to assurances that they have reformed, there are ample signs that they are not here to attend the church picnic.

Bidding, unfortunately, does nothing to correct the mistakes of the past. Though many of the players remain the same, the game is new. It forces players into a vicious competitive spiral to underbid their competitors by drastically cutting costs. Safety and the environment could be the first to fall victims to the bidding range wars.

 The rush of 99 could well be the U.S. wind industry’s last chance to convince the American public that wind works economically, and that it is compatible with people and the environment. We may very well not get another chance. We must do it right this time, and we must use some of the revenues from these new projects to clean up the mess left from development in the 1980s by removing inoperative turbines, by restoring damaged sites, and by revegetating ravaged hillsides.

If we don’t, we may awaken one morning to find the townsfolk have armed themselves, intent on running the gamblers and gold seekers out of town at gun-point, never to let them return.