New agreement bumps company into lead for renewable
purchases among Southeast utilities
Alabama Power Co. said recently that it has received approval from
the Alabama Public Service Commission to purchase more electricity
from Midwestern wind projects. A new purchase of electricity from
Buffalo Dunes Wind Project, LLC, the firm said, mirrors one
previously approved with Chisholm View Wind Project, LLC. Combined,
the deals add up to 404 megawatts of electricity, and each project
is under contract for 20 years.
Chisholm View Wind Project, located in Grant and Garfield
counties, Oklahoma, is scheduled to begin operations in December.
The 405-MW Buffalo Dunes Wind Project will be built near Garden
City, Kan., by TradeWind Energy, LLC, with a targeted operation date
of 2014.
The two contracts are among the largest agreements for the purchase
of energy produced from wind farms among Southeast utilities,
Alabama Power said, adding that each gives the company "valuable
flexibility. For example, Alabama Power can use the energy and
associated renewable energy credits as part of its service to local
consumers, or Alabama Power can sell those credits, separately from
the energy, to outsiders. In either case, the contracts are
expected to provide net savings to Alabama Power ratepayers."
[emphasis added]
“We’re always looking for environmentally friendly ways to produce
and obtain rights to reliable, cost-effective electricity,” said
John Kelley, Alabama Power’s resource planning director. “These two
agreements represent a win-win for the company and the people we
serve.”
In approving the proposed transaction, the Public Service Commission
emphasized the cost savings to Alabama Power ratepayers: "As
described in [Alabama Power's] Petition and discussed at the
hearing, the Buffalo Dunes PPA [Power Purchase Agreement] is
expected to bring positive benefits to customers over its term.
Specifically, the delivered price of energy from the wind
facility is expected to be below the Company's projected avoided
costs (i.e., lower than the cost the Company would otherwise incur
to produce that energy from available marginal resources), with the
resulting energy savings flowing directly to the Company's
customers. Staff has analyzed the PPA and its terms
and conditions, and has reviewed the Company's economic analyses and
supporting data in order to test the reasonableness of that data and
the associated projections. In Staff's view, this information
demonstrates that the Buffalo Dunes PPA reflects an opportunity to
procure rights to a cost-effective renewable energy resource that
can be expected to yield positive net benefits to customers over its
term." [emphasis added]
Related reading:
AWEA fact sheet, "Wind energy lowers electricity prices"
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