Cowlitz PUD sells share of wind farm energy to Shell

December 12, 2013 by  
Filed under Green Energy News

Cowlitz PUD expects to sell about $5.5 million in excess wind energy from its Central Washington farm next year, which utility officials say will help keep rates stable.

However, the market to sell renewable energy such as wind is expected to dry by the end of the decade, analysts say, placing more pressure on Cowlitz commissioners to raise customers’ rates.

On Nov. 26, the PUD commissioners approved the sale of 31 percent of the utility’s share of the output of the 205-megawatt White Creek wind farm to Shell Energy, which will market the power to California public utilities hungry for renewable power. The $5.5 million Shell will pay is down from $7.4 million in PUD wind energy sales this year.

“It helps offset the power costs. It’s a benefit then to the ratepayers,” Gary Huhta, the PUD’s director of power management, said Wednesday.

Cowlitz was one of the early investors in renewable energy after Washington voters approved Initiative 937, which required large utilities to invest in new, costlier renewable projects or buy credits. The utility owns about half the output of 205-megawatt White Creek project, the largest public-power wind project in the country, and it also owns a 30 percent share in 30-megawatt Harvest Wind project nearby.

The 205-megawatt White Creek wind farm is the largest public-power project of its kind in the nation.

The PUD and other West Coast utilities wanted to take advantage of California’s demand for renewable energy, and the PUD hoped sales to California would pay off its loans for the White Creek and Harvest Wind projects. Those hopes soured, though, when California decided in 2011 to require all renewables to be generated within the state by 2020.

For non-California-based utilities such as Cowlitz, wind energy and other renewable power supplies were suddenly much less valuable. The move forced the PUD to jack up power rates 18 percent in 2011.

“There’s a bigger supply of (renewable energy) in the Northwest, from non-California utilities, than there is demand in California,” Charlie Black of the Northwest Power and Conservation Council said Wednesday.

The wind-energy market hasn’t completely dried up, however, and PUD officials said this week they expect to sell wind energy through 2020. That’s when the utility will have to use all its wind energy at home to comply with terms of voter-approved Initiative 937, which mandates that 15 percent of utilities power come from renewable sources (excluding hydropower).

The wind farms ensure Cowlitz will not need to purchase outside renewables to comply with I-937. That’s why PUD officials believe the wind energy investments will pay off in the long run, even if they’ve not worked out as planned in the short run.

“The more we can secure our position and make our future known, the better off we are,” PUD General Manager Don McMaster said Wednesday.

The PUD residential rates 5 percent this year and will consider similar rate hikes in the next two years to fix a decade-old imbalance with industrial customers. Those hikes would have nothing to do with the utility’s wind energy projects.

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