Mr. Daniel P. Wolf
Minnesota Public Utilities Commission
121 Seventh Place East
Saint Paul, MN 55101-2147
RE: Paynesville Wind, LLC Site Permit and Certificate of Need (PUC Docket Nos. IP6830/WS-10-49 and IP6830/CN-09-1110
Paynesville Wind, LLC ("Paynesville") submits this response to your May 8, 2015 Request for Permittee to Show Cause under Docket Nos. IP6830/WS-10-49.
Paynesville has been unable to obtain a Purchase Power Agreement (PPA) or other enforceable mechanism for the sale of electricity from the proposed wind project. Lacking a PPA, Paynesville has also been unable to commence construction under the permit. We agree that Paynesville should have provided information to the Commission by February 7, 2015 regarding these issues, and we apologize for failing to make that communication.
While the Paynesville project has been offered into numerous solicitations for wind energy over the past two years, we have not been awarded a contract in any of those solicitations. As we understand factors related to the selection of wind projects, we surmise that we have been unsuccessful based on some of the cost and interconnection attributes of the project. Paynesville does not believe current market conditions are favorable to construct the project on a merchant basis to sell energy into the MISO market. Thus, our failure to commence construction under Permit Condition 10.3 is directly related to our inability to obtain a PPA.
Paynesville has continued its development and marketing of this project, but understands that it will likely need to obtain a new Site Permit and Certificate of Need in order to proceed with the project. We will make the necessary filings with the Commission if and when we decide to move forward with the project.
Paynesville Wind, LLC