Bel-Air billionaire Selim Zilkha is among those who have been making a bundle off the state's energy crisis, and now he's positioning himself to make an even bigger bundle on helping to solve it.
Zilkha a major shareholder of natural gas supplier El Paso Energy Corp., which has benefited from a runup in prices is busy creating what he hopes will be a renewable energy empire that will make wind power a reliable and serious energy option.
"With new technology and better management, we can make wind power really economical for the first time," says Zilkha, referring to the company he set up with his son, Michael, called Zilkha Renewable Energy.
Since Zilkha, a 74-year-old Baghdad native, has made several fortunes throughout his long career he's one of only 21 known billionaires whose primary residence is in Los Angeles his views certainly carry some heft. But wind power? Isn't that one of those feel-good "green" investments that limousine liberals tout, but that nobody ever makes serious money on?
"Look, this industry is only just coming out of its infancy," Zilkha points out. "For most of the last 20 years, many wind farms have really been places to park money for tax shelters. No one has really been able to make a profit at this until now."
Zilkha and industry analysts say that technology has lagged behind the dreams of policymakers and environmentalists for years, making it not economically feasible to pursue wind energy on a wholesale level.
But with the energy crisis pushing wholesale electricity costs to 10 cents or even 15 cents per kilowatt-hour in recent months, and wind power finally getting down to the 5-cents-per-kilowatt-hour threshold, the economics of wind power are suddenly much more favorable.
Of course, the $20 million or so that Zilkha has thus far sunk into his wind power venture represents little more than a molecule of his $1 billion body of wealth. Nonetheless, he seems convinced that vast energy riches are blowing in the wind, and he is undertaking a plan to scoop up a bunch of it.
The first step: modernizing hundreds of windmills up and down the state, making them more efficient and producing more electricity for power-starved Californians.
But there are several roadblocks in the state for Zilkha and other wind energy producers, including uncertainty about being paid for some of the power they've generated and practical limits on the number of windmills that can be installed here. As a result, much of Zilkha's attention at least for the time being is focused on areas where there's more open land and stronger, more-consistent wind currents. He is especially bullish on Iowa and Pennsylvania.
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