Vail's Wind Ambition

Buying wind, it seems, is a complicated venture. Last week the Colorado ski and recreation company Vail Resorts Inc. announced it would purchase 100% of its energy use — roughly 152,000 megawatt-hours a year — from wind farms. But that doesn't mean Vail is dumping its old energy providers. Instead it has purchased "wind power credits" from a Boulder-based company called Renewable Choice Energy, which in turn pays wind farms throughout the country to produce electricity — enough to offset 211 million lbs. of carbon dioxide emissions each year. This purchase makes Vail the second-largest buyer of wind energy in the nation behind the supermarket super-chain Whole Foods, which went 100% wind power with their 458,000 megawatt-hours in January.

It all sounds simple enough, right? Not quite. In order to understand such environmental ambition, it's important to realize how energy is distributed. Every energy producer — whether coal, nuclear or wind — gets paid a flat rate to produce electricity, all of which is dumped into a central national power grid and distributed through different energy providers throughout the country. Making a single megawatt-hour of electricity from wind, however, is more expensive than one from fossil fuel. So wind farmers sell credits, which are priced to cover the difference in cost and allow them to stay in business. By purchasing these credits, Vail is only ensuring that at least the amount of energy it uses from the national grid is eventually replenished with wind power.

This gesture doesn't come cheap. Essentially Vail is paying for two separate energy bills. "There's not a cost savings for them," says Renewable Choice CEO Quayle Hodek. "It's an additional cost — kind of like paying more for an organic apple." But, he reminds, "it's not double. They're just paying the difference." Vail won't disclose the added cost to their energy bill, but to put it in perspective, an average household would have to pay roughly $15 extra per month to replace their energy consumption with wind. For a company that operates resorts in Colorado, California, Nevada, and Wyoming in addition to 125 retail stores nationwide, the difference can add up.

To offset their extra expense, Vail has chosen the peculiar strategy of giving away a free lift ticket to homeowners who offset their own energy use via Renewable Choice (Whole Foods' strategy is to offer gift cards). This additional cost is made in the hopes that skiers, who arguably have an interest in preserving the environment, will be encouraged to choose Vail's resorts over its competitors. "We're hoping our guests sign up and have heavy participation in our program," says Vail CEO Rob Katz, "and then think, maybe I'll ski an extra day, maybe an extra two days.'" The only danger would be if consumers don't respond, in which case the company may find its green goodness is full of hot air.