"Backcasting" Study of Wind Energy's Consumer Benefits

August 21, 2006

A trailblazing new “backcasting” econometric study released by the Interwest Energy Alliance documents the significant savings that wind energy is providing to Xcel Energy’s customers…and quantifies the savings consumers would have enjoyed if Xcel Energy (Public Service Company of Colorado, "PSCo") had acquired more wind energy during its solicitations in 1999, 2004 and 2005.

By comparing existing wind projects and wind projects that were proposed (but not built) to the cost of natural gas generation (which wind energy most often displaces), the authors of this study, Jane Pater and Ron Binz, quantify the savings that wind energy generation has already provided Xcel Energy’s consumers, and project what consumers would have saved if additional amounts of wind energy generation had been added to Xcel’s power generation portfolio.

Significant findings from this study include:

The cost savings for wind generation that PSCo has already acquired will produce more than $251 million in fuel and emissions costs in savings for PSCo ratepayers.
Had PSCo decided to acquire additional wind generation, this study calculates that Colorado ratepayers would have saved $438 million over the life of these contracts, an additional $186 million over the savings that will be achieved based on Xcel’s past decisions.
Wind generation will prevent 19.2 million tons of carbon dioxide in the base case; adding the wind generation suggested in this study would further reduce carbon dioxide emissions by 14.7 million tons.

Read the full study, “Wind on the Public Service Company of Colorado System: Cost Comparison to Natural Gas,” (PDF, 320 KB) by Jane E. Pater of Entrepreneurial Solutions with consultation by Ron Binz of Public Policy Consulting.