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Following the Wind Mark Ohrenschall Con.Web, October 29, 2003

Public Power Consortium, Bonneville Environmental
Foundation Pursue Washington Wind Project

A landmark proposed Northwest wind energy project has moved closer to fruition.

Wind development rights for a 20,000-acre site in south-central Washington have been obtained by a consortium of Northwest publicly owned utilities and Bonneville Environmental Foundation, which anticipate a wind farm of 150 megawatts capacity to 200 MW capacity, starting operations in the next two to three years. Many key tasks still remain ahead, including permitting, financing, power-purchase agreements and interconnection arrangements.

This project is envisioned as a wind power "shopping mall" for public power utilities. Participants currently plan to own the proposed facility, but it could be privately developed and the energy output sold to partners, according to Elmer Sams, general manager of Tanner Electric Cooperative and board president of Last Mile Electric Cooperative.

Both those entities are involved in this venture, along with BEF (in its first large-scale wind project) and other Last Mile members Kittitas County PUD, Klickitat PUD, Lakeview Light and Power, Mason County PUD No. 3 and Plumas-Sierra Rural Electric Cooperative.

This prospective wind farm is open to other public-power utilities, and perhaps investor-owned utilities and private companies, according to Last Mile's outgoing executive director Dave Warren. "We haven't really ruled out any scenario," he told Con.WEB.

It is part of a larger vision for more direct involvement by smaller, rural public-power utilities in Northwest wind energy, which has been dominated by private wind developers and marketers, IOUs, large municipal utilities and Bonneville Power Administration.

It also signifies a coming-of-age for wind power as a competitively priced energy resource attractive to conservative public-power utilities, according to Warren.

"We think that over the 20-plus-year life expectancy of the project, it's going to actually show itself to be very cost-effective, not just for alternative environmentally sound energy ... but as related to the market," said Sams.

Proposed Wind Project

The project partners recently bought wind energy development leases from two companies, Warren said. Those companies are SeaWest Corp. and Northwestern Wind Co., according to a news release.

These approximately 20,000 acres lie north of the Columbia River, between Rock Creek and the Roosevelt Regional Landfill, in Klickitat County. Two years of wind data indicate potential for up to 200 MW of wind-powered capacity.

The site has many similarities to Stateline Wind Energy Center, according to Klickitat County economic development director Dana Peck. It hosts wheat farming as well as cattle grazing and some conservation reserve lands not in production, he said.

"We're catching our breath after getting the purchases closed," said Warren. "The [Last Mile] board is starting to review our options and get a road map of what's required now."

Warren and BEF vice president/renewable energy programs director Rob Harmon both said they are unaware of any major permitting issues for the proposed site. Bird studies are ongoing. Project partners also plan to talk with the Yakama Indian Nation.

Project partners have not yet filed an application with Klickitat County, which is proposing an "energy overlay" zoning plan to steer energy facilities into certain approved areas. Under the currently proposed map, Peck said, the proposed public-power wind project would fit in an allowed energy zone and thus would not need a county conditional-use permit. Energy developers would still have to follow environmental reviews, he added.

The proposed energy overlay is in a public process and still needs approval from the Board of County Commissioners, Peck said.

In addition to permitting, several other vital tasks await before any wind turbines are spinning out electrons.

One is financing. Warren said this could be influenced by pending federal energy legislation, specifically the potential for tradable tax credtis for publicly owned utilities.

Rural Utilities Service and National Rural Utilities Cooperative Finance Corp. "both have shown an interest in loaning us money to do this," Sams said.

He said project partners are planning on ownership, but, "We're holding the possibility open that, depending on financing arrangements and a lot of other variables, we may farm it out to a developer and then just purchase the output."

Transmission is another issue, although a BEF news release said Klickitat PUD is "expected" to furnish interconnection and transmission services for the project in its service territory. Bonneville Power Administration also would be involved, as the proposed project lies within BPA's control area, said PUD engineering manager Jim Smith.

Specific power allocations for the planned wind energy are "premature," Harmon said, as the project's exact size and cost are still unknown. BEF could take green tags, electricity or some other product, he said.

Foundation board chairman Mark Hatfield described this as "our largest commitment to new renewable energy in the five years we've been operating. It redeems our pledge to the many supporters of the Foundation that we would use our funds to leverage a new, sustainable future for the Pacific Northwest," he said in a news release.

BEF has long considered supporting big wind power, but it had insufficient resources to develop its own project, Harmon said.

"One of the advantages here is we do what we usually do; partner with other organizations," he said. "Many other small utilities are in the same boat as BEF. That's why Last Mile Electric Co-op was set up, for utilities all to work together. In some ways it was a perfect match for BEF."

Warren believes many utilities will find it worthwhile to participate in this "public power shopping mall," particularly smaller utilities needing to meet load growth after 2006. They could secure power from the wholesale market, he said, but that involves high transaction costs and requires a certain expertise. Here they could opt for specified amounts and duration of cost-based wind power, hedging risks with Bonneville Power Administration rates and natural gas prices. "We just think it's got a whole lot of value," he said.

So does Sams. "We've ... had the belief that Bonneville may not have enough power to go around in the next 10 years, and we just think that it's necessary to do something about taking care of ... some of our own future needs," he said. He thinks this wind power would compete well in price with BPA load-growth rates or the markets, although he also said a couple of utilities balking at wind project ownership have "WPPSSitis"--a fear of a large energy resource investment with escalating costs.

General manager Robin Rego of Lakeview Light and Power, quoted in the BEF news release, touted wind's potential to "add diversity and price stability for consumers who have been on a power-rate roller coaster the last several years."

Winds of Change

Warren finds it a "pretty amazing statement" that "some conservative utilities" are moving forward on a wind energy development. "The underlying theme here, which is fairly profound, is that wind is a competitive resource," he said. It also promises rural economic development, a major public power goal, he added.

Warren quoted Aaron Jones, former general manager of Washington Rural Electric Cooperative Association and a leader in establishing Last Mile, as predicting that wind power could be a prominent chapter in the rural electrification story.

Jones outlined his vision at a public power wind conference in Portland in April 2001, shortly after Last Mile's incorporation.

He called wind "the future of energy supply," regionally as well as internationally. Jones described public power's mission to serve its customers/members--most of whom would probably choose renewables, given competitive prices. He also noted that Washington public-power service territories cover many potential wind sites.

"The bottom line is: Who is going to own the wind? That's a very important question," he told the conference, harkening to the development of Northwest hydropower in the early- to mid-1900s.

In a subsequent interview with Con.WEB, Jones elaborated on this thought. "My own personal motivation is I've had to live too long with the knowledge that other parties developed the hydro sites, and co-ops sat by, thinking it was too expensive. Basically I think we failed in our responsibility to provide cost-effective power to our members. I don't think we want to fail again."

Public-power wind development has to be done cost-effectively, he told the conference, while serving the interests of rural landowners.

"We wanted public power involved [in wind]. And we think we found a way to get public power involved," through Last Mile. "We will do as much or we will do as little as public power has an appetite to do here in the Northwest. We won't do it alone," he said

Related Sites:
Last Mile Electric Cooperative www.lastmile.coop
Bonneville Environmental Foundation www.bonenvfdn.org