Why Pay More for Windpower, ND PSC Asks?

Today, March 19, 2007, the North Dakota Public Service Commission met to discuss what they were going to do with regard to the NSP/Xcel Energy “Voluntary Renewable Energy Rider” (PU-06-439) otherwise know as the Windsource program.

Xcel Energy is the largest retail utility in North Dakota with a 19.26% market share (2005 ). Their growth in North Dakota sales has been at an annual average rate of 1.57% between 1999 – 2005. They are the largest purchaser of wind power in the United States. They access over 600 MW of wind in Minnesota and 12 MW in North Dakota.

Since Fargo, Grand Forks and Minot are served by Xcel’s northern plains power system, we already receive a portion of our electricity from Xcel’s Minnesota wind projects. Xcel had told the ND PSC that they would like to launch Windsource in order that they could build more wind power in North Dakota. It is kind of like if we pay extra they will build wind in North Dakota; however, in Minnesota they do it because they are required or because, as they have also said, it is the least expensive form of new generation. Wind resource is better in North Dakota than Minnesota and any electricity they access in ND is that much less they would have to import. Reducing our power imports will actually help increase our net power export market – physically in the case of transmission in and economically.

Why pay extra for wind power? Is it really more expensive than other forms of new generation? If so, how much more? The ND Public Service Commissioners were unsure that wind was more expensive. Primarily for that reason, they turned down the Windsource tariff. Why ask people to pay more for something that may not be more expensive? As one of the commissioners said, this is an anachronistic tariff based on a time when wind was a more expensive boutique form of generation. Today the costs have levelized. NSP/Xcel Energy has to prove that wind is more expensive in order to charge more for it. And, that becomes a problem when they have said elsewhere that wind is a lower cost option for new generation.

North Dakota Public Service Commission deserves praise for not effectively approving a cost myth about wind power. They will have the written decision by April 15th – and we will cover it here.