This article was originally published in the Denver Post on April 19,010

The New Energy Economic Development grant program at the Governor’s Energy Office is touted as an unqualified success. Of course, if giving other people’s money away is your objective, it’s exceedingly hard to fail.

The NEED program makes taxpayer money available for renewable energy and energy efficiency projects in Colorado. The goals are laudable enough, but this program is a hugely flawed subsidy program that distorts the true cost of energy in the marketplace. NEED smacks of technocratic elitism, giving bureaucrats the task of picking winners and losers through centralized economic planning. In other words, it’s Colorado’s version of the old Soviet Union’s Five-Year Plans.

Exhibit One: Calhan School District. The district is replacing its antiquated HVAC system with a ground source heat pump, an innovative technology devised to take advantage of moderate ground temperatures. But while $36,000 in annual savings is enough to induce euphoria in any school district, the $2.9 million price tag should temper some enthusiasm. According to these numbers, the project won’t break even until 2091. Even if we assume, more charitably, that propane prices increase by 400 percent, it would still take the district more than a decade to warrant their $3 million investment.

Granted, the heat pump will address hazardous carbon dioxide levels and provide much-needed air conditioning on sultry summer afternoons, but can the Governor’s Energy Office justify a $305,000 contribution? The project will waste public money and impoverish Colorado’s remaining 177 school districts.

Another example is the Denver Regional Council of Governments’ (DRCOG) high-definition, Web- based satellite map, a $1 million application that enables residents to calculate energy and cost savings with the click of a mouse. Because DRCOG conducts aerial mapping every other year for planning purposes, the Governor’s Energy Office argues that their $189,000 grant leverages an existing expenditure into additional value. “It won’t take many [installations],” a spokesman said, “for the amount of the grant to be recouped entirely through electricity bill savings alone.”

But as with previous projects, this one, too, is dubious. The three U.S. cities cited in DRCOG’s project proposal as the successful vanguard of the technology have pitiful track records. San Francisco registers a mere 200 monthly website visitors, but keeps no record of total installations. Berkeley registers about 215 monthly website visitors, but the aerial maps have only prompted five installations over the course of an entire year. Boston’s average of 2,400 monthly visitors is remotely encouraging, but without a record of total installations, it’s hard to evaluate the program on its merits.

Additional evidence of questionable spending can be seen at the Rocky Ford Feedlot in Otero County, where B&H Industries is receiving $145,000 towards a $695,000 solar energy investment. The project is expected to reduce annual CO2 emissions by an impressive-sounding 344,000 pounds. But according to the Terrapass.com carbon footprint calculator, one round-trip flight from New York City to San Francisco on a full 737 jetliner will contribute roughly the same amount of CO2 (356,400 pounds) that Otero County will save over the course of an entire year with their trendy solar panels. Bragging about 344,000 pounds of CO2 reductions is like boasting that you lost 2,000 grams on your South Beach diet — it’s disingenuous.

Planners and recipients are agog about the NEED program, but the poor evidence reveals these projects as feckless government initiatives that will raise both tax burdens and energy costs for years to come.

The idea of authorizing bureaucrats to pick economic winners and losers should have died with the former Soviet Union, but such failed central economic planning theory is alive and well in Colorado. And instead of calling it a “Five-Year Plan,” we’ve dubbed it the “New Energy Economy.”

Stephan Burklin is a research associate at the Independence Institute, based in Golden.