Article

Winds of change: Springville mulls renewable energy purchase

UAMPS is looking to install a 108-megawatt wind farm in Bonneville County, Idaho, and needs cities to commit in advance in order to buy up to 56 wind turbines for the project. Amid the complicated numbers and projections that filled last week's meeting, one aspect became the decision's true hinge: Will the need for renewable energy in the future justify its higher cost now?

SPRINGVILLE -- There are winds of change coming to Utah County, but it's anybody's guess as to which direction they're blowing.

Tuesday night Springville will revisit the tangles of the multi-city Horse Butte Wind Project that baffled more than a few at a city council meeting two weeks ago. Council members will decide whether to commit to 20 years of future wind power shares along with other members of Utah Associated Municipal Power Systems -- Lehi and Eagle Mountain have already signed off; Payson did not.

UAMPS is looking to install a 108-megawatt wind farm in Bonneville County, Idaho, and needs cities to commit in advance in order to buy up to 56 wind turbines for the project. Amid the complicated numbers and projections that filled last week's meeting, one aspect became the decision's true hinge: Will the need for renewable energy in the future justify its higher cost now?

"I think it should be very clear that this is a green energy discussion more than a good deal for the city," administrator Troy Fitzgerald said last week. That's because the $65/megawatt-hour price is even, at best, with current resources, and there are cheaper options out... more [truncated due to possible copyright]  

SPRINGVILLE -- There are winds of change coming to Utah County, but it's anybody's guess as to which direction they're blowing.

Tuesday night Springville will revisit the tangles of the multi-city Horse Butte Wind Project that baffled more than a few at a city council meeting two weeks ago. Council members will decide whether to commit to 20 years of future wind power shares along with other members of Utah Associated Municipal Power Systems -- Lehi and Eagle Mountain have already signed off; Payson did not.

UAMPS is looking to install a 108-megawatt wind farm in Bonneville County, Idaho, and needs cities to commit in advance in order to buy up to 56 wind turbines for the project. Amid the complicated numbers and projections that filled last week's meeting, one aspect became the decision's true hinge: Will the need for renewable energy in the future justify its higher cost now?

"I think it should be very clear that this is a green energy discussion more than a good deal for the city," administrator Troy Fitzgerald said last week. That's because the $65/megawatt-hour price is even, at best, with current resources, and there are cheaper options out there, he said. "While this decision doesn't raise rates, it certainly doesn't lower them," he told the Daily Herald on Friday.

Now things get hairy -- the $65/mwh rate is only possible with a 100-percent take, and the capacity is only filled to about 65 percent right now, Springville power director Leon Fredrickson said. The project will still move forward with 50 percent or higher, but that could raise the price to around $70/mwh, he said. Considering Springville, like Lehi and Eagle Mountain, is looking to authorize an "up to five mwh" stake in the project -- about 1,200 mwh, or $82,600, per month, he said -- that five bucks could be significant.

But at this point, Tuesday's resolution doesn't include any provision to back out if a certain capacity isn't reached, Fredrickson said -- though UAMPS could still vote one in.

The advantages in buying this green energy now are that the rate is locked in for 20 years; supposing fossil fuel prices jump up, that's a plus. The project will also take advantage of a 30-percent cash grant from the American Recovery and Reinvestment Act. This actually further complicates the matter, as the non-profit UAMPS had to partner with a for-profit holding corporation, Citigroup Inc., to receive that grant.

"Frankly, I for one am going to have to take your word for it; I don't understand all the intricacies of how the cost is computed," Councilman Neil Strong said last week, though he didn't appear to be alone.

Part of the plan includes a buy-out option six years into the project (when tax advantages are exhausted for Citigroup) in which UAMPS cities can purchase the facility outright, Fredrickson said. This buy-in also serves as part of the safety net -- if the wind doesn't blow like it's supposed to, and Springville doesn't get all the pre-purchased power it's owed -- it will be credited toward the purchase of the farm, he said.

But again, it all boils down to putting some green into the energy portfolio, Fitzgerald said.

The Utah Legislature has required cities to run on 20 percent renewable sources by 2025, he said, but so far there are no penalties attached. The federal government could soon do likewise. With this project, Springville's portfolio would be about 14 percent renewable, Fredrickson said, though that depends on the highly-debated point of including hydroelectric resources as "renewable."

"The current administration's focus on green-specific energy may quickly change based on new administration in the future," warned Councilman Ben Jolley. "Nothing against wind per se."

Either way, Fitzgerald has heard enough anecdotal comments around city offices to lead him to believe that Springville citizens would like to see some renewable resources added in. Whether they like it enough to, say, pay a premium for it on a house-by-house basis remains to be seen, he said.

The other concern last week was that as demand for renewable energy goes up, ideal sites will be sparse, though Fitzgerald downplayed it Friday, saying Springville isn't a big enough player to worry about snatching up huge chunks of power.

"We buy things in leftover crumbs that fall off the big boys' tables," he said.

But the Horse Butte site is a windy one for sure, Fredrickson said, and with the purchase-protection provision, it's hard to turn down if green energy is a priority. The farm is rated at 33 percent P50, or a 50 percent probability, that the wind will power the turbines 33 percent of the year. It is rated 25 percent at P99. The price model is based on the P50, Fredrickson said, and any year the wind is weaker than that, UAMPS cities will get future credits.

By comparison, the nine-turbine wind farm at Spanish Fork, which all feeds into Rocky Mountain Power, generates 19 megawatts and was estimated to provide 55,000-mwh annually, according to UtahCleanEnergy.org. This comes to a similar 33-percent average wind power over the course of the year. But estimates at the Springville meeting put the Spanish Fork site around 20 percent.

The Horse Butte project should be up and running by 2012, at which point Springville would start paying for and receiving wind power in its base load, Fredrickson said. Tuesday's meeting begins at 7 p.m. at Springville's council chambers, at 110 S. Main St.


Source: http://www.heraldextra.com/...

OCT 4 2010
https://www.windaction.org/posts/28316-winds-of-change-springville-mulls-renewable-energy-purchase
back to top