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WIND ENERGY WEEKLY VOL. 14, #672, 13 NOVEMBER1995
The following is the electronic edition of _Wind Energy Weekly_,
Vol. 14, #672, 13 November 1995, published by the American Wind
Energy Association. The full text of the _Weekly_ is available
contact
AWEA, 122 C Street,
NW, 4th Floor,
Washington, DC 20001,
USA
Ph: (202) 383-2500, fax (202) 383-2505, email
ENERGY OUTLOOK
Schaefer plans broad electric reform bill
Residents of Salem, Ore., show strong support for renewables
GLOBAL WARMING
Belize rain forest to become CO2 offset
TRADE NEWS
Britain to move soon on fourth NFFO round
Mitsubishi inks license deal with Indian firm
BRITAIN MAKES PLANS FOR
NEXT RENEWABLES BIDDING
The government of the United Kingdom plans to conduct the
fourth round of bidding for contracts to supply electric power
from renewable resources later this month, according to the
Reuters news service.
Competition in the latest section of the Non Fossil Fuel
Obligation (NFFO) program will take place for the supply of 400
MW to 500 MW of new generating capacity from wind, hydro,
landfill gas and other renewable energy sources. As in the last
round (see Wind Energy Weekly #630, January 16, 1995), bids will
be invited for wind farms and for smaller clusters of wind
turbines.
Energy Minister Richard Page said in a statement that
contracts in the new round will be signed for a period of 15-20
years. Bid awards are scheduled for early 1997.
The NFFO program is paid for by a surcharge on electricity
rates and is designed to provide a market within which renewable
energy companies can compete to bring prices down. In the third
NFFO round, awarded in January, bids for wind farm projects
averaged 6.7 cents/kWh, or 50 percent less than in the second
round, which was held in 1991.
To date, the NFFO program has resulted in the construction
of 146 new generating projects totalling 329 MW.
SCHAEFER PLANS COMPREHENSIVE
ELECTRICITY REFORM BILL
Congressman Dan Schaefer (R-Colo.), who chairs the House
Subcommittee on Energy and Power, said Nov. 2 that he plans to
introduce next year a "comprehensive" bill to reform the electric
utility industry.
Schaefer has previously said that he believes changes in the
Public Utility Regulatory Policies Act of 1978 (PURPA), which
requires utilities to buy power that is offered for sale by wind
power plant operators and other independent producers, should be
made only as part of a larger reform package that would address
the overall question of competition in the industry (see Wind
Energy Weekly #667, October 9, 1995).
Press reports said Schaefer expressed support for the
general concepts of stranded asset recovery and retail wheeling,
but some uncertainty about how both might be accomplished.
Stranded asset recovery, in which utilities would be compensated
somehow for past spending on expensive power plants that are no
longer economical, is likely to be unpopular with a public that
wants lower electricity rates. And some fear that retail
wheeling, under which customers could choose from among many
suppliers, will undermine state regulation of the utility
industry and give more power to federal regulatory agencies.
In other related news:
- American Electric Power (AEP), a large Midwestern utility,
announced on October 27 a statement of principles it
believes should guide utility restructuring. AEP endorsed
the concepts of an independent transmission system operator
(ISO) and a regional power exchange (RPX) that have been
advanced by utilities in California. The AEP principles do
not include retail wheeling for individual homeowners--the
utility said they "will not be able to participate directly
in the competitive market or would not want to take on the
time, effort or expense." However, it added, "they could
still obtain the benefits of competitively-priced
electricity" through purchases by their local electric
utility or cooperative. AEP proposes that an extra power
transmission charge be levied to pay for stranded asset
recovery.
- A western Pennsylvania gas company, Equitable Resources,
petitioned the state's Public Utilities Commission October
30 to establish a pilot retail wheeling program for
residents of the Pittsburgh suburb of Pleasant Hills. The
two-year program would allow homeowners to choose gas and
electricity providers in the same manner as they choose
phone companies. Pleasant Hills, a town of 8,000, was
selected because residents pay widely varying rates for
electricity. Under the Equitable proposal, utility bills
would "unbundle" (separate) the costs of generation,
transmission, and distribution.
- Three companies announced October 30 that they have formed a
new venture, Northwest Power Co., to market power products
and services in the Pacific Northwest. They include KLT,
Inc., a subsidiary of Kansas City Power & Light; CSW Energy,
a subsidiary of Dallas-based Central and South West Corp.;
and KVA Resources, Inc., an independent power developer
based in Bellevue, Wash. Northwest Power will develop three
gas-fired plants already planned by the partners.
- The so-called PURPA Reform Group, a coalition of
investor-owned utilities, predictably praised a bill
introduced in the House of Representatives last week by Rep.
Cliff Stearns (R-Fla.) that would repeal PURPA. But the
National Association of Independent Energy Producers (NIEP)
said the proposal would "undermine nearly two decades of
significant progress toward true competition." In testimony
on the Senate version of the bill, AWEA has acknowledged the
need for changes in PURPA, but has argued against repeal
(see Wind Energy Weekly #653, July 3, 1995), calling PURPA
"the only federal law that subjects [utilities] to
competition."
MITSUBISHI LICENSES TWO
TURBINE DESIGNS IN INDIA
Mitsubishi Heavy Industries, Ltd. (MHI), of Japan said
October 30 that it will license an Indian firm, Sree Rayalaseema
Power Corp. (SRP) of Kurnool, to build 315-kW and 450-kW wind
turbine models based on MHI technology.
Japan's Kyodo news agency said SRP plans to build wind power
plants in the Indian states of Tamil Nadu, Andhra Pradesh, and
Gujarat.
In related news, China's Xinhua news service reported
October 30 that India has reached a total of 540 MW of installed
wind capacity, and plans to install an additional 200 MW during
the next six months. According to India's Ministry of
Non-conventional Energy Sources (MNES), wind capacity at the end
of September surpassed the 500-MW goal set in the country's
Eighth Five-Year Plan, which runs from 1992 to 1997.
UTILITY JOINS RAIN FOREST
RESCUE AS CO2 OFFSET
Detroit Edison Co. said November 1 that it will join a
voluntary international effort with three other utilities and two
conservation groups to offset greenhouse gas emissions by
protecting an endangered rain forest in Central America.
The possibility that emissions of greenhouse gases could
change the Earth's climate is a concern that knows no national
boundaries," said Edison President and Chief Operating Officer
Anthony F. Earley Jr., said in announcing the move. "This
project allows Detroit Edison and its partners to reduce a
greater volume of greenhouse gas emissions than any power plant
efficiency improvement known today. It complements our other
voluntary efforts such as planting millions of trees in Michigan
and developing biomass projects throughout the nation to reduce,
avoid or sequester emissions."
Other partners in the Rio Bravo Carbon Sequestration Pilot
Project, as the effort is called, are Wisconsin Electric Power
Co. of Milwaukee, Cinergy of Cincinnati, Ohio, Pacificorp of
Portland, Oregon, The Nature Conservancy and Programme for
Belize.
The participating utilities will contribute $2.6 million to
The Nature Conservancy and Programme for Belize to fund the
project. Belize, a Central American nation of 200,000 people and
a former British territory, lies between Mexico and Guatemala.
The funds will be used to establish a sustainable forest
management program on 65,000 acres of tropical rain forest in
Belize's Rio Bravo Conservation Management Area and to purchase a
14,000-acre parcel of endangered forest lands in northern Belize,
which will become part of the 65,000-acre protected area.
Scientists believe that forest preservation plays an
important role in stabilizing the world's climate by absorbing
carbon dioxide in the atmosphere. The Rio Bravo project is
expected to help reduce greenhouse gas emissions--primarily
carbon dioxide--by 5.2 million tons over 40 years.
Under the Climate Challenge agreement signed in February
with the U.S. Department of Energy, Detroit Edison agreed to
projects and activities that are expected to reduce greenhouse
gas emissions by more than 1 million tons by the year 2000.
The Climate Challenge agreement evolved from a commitment
made by the United States and nearly 200 other nations in 1992.
The nations agreed to balance greenhouse gas emissions at 1990
levels by the year 2000 and created a joint implementation
process.
SALEM, ORE., RESIDENTS TO GET
WHAT THEY WANT--RENEWABLES
Following a unanimous vote by its board of directors in
September, Salem (Ore.) Electric Co. has begun to investigate
options for displacing its nonrenewable sources of electricity
with renewables.
The utility's board voted to invest in as much renewable
power as possible within a 4% rate cap, which it estimates will
allow the utility to obtain 15% to 20% of its power from
renewables.
The Bonneville Power Administration (BPA), a federal power
marketing agency, now supplies all of Salem Electric's power and
could dedicate a portion of the output from its planned renewable
energy projects to the utility, but Salem Electric is looking at
other possible renewable energy suppliers as well.
"We think that BPA should blend in the price of renewable
power the same way that it blends in the cost of dead and dying
nuclear plants," said Steve Weiss, who serves on the utility's
board. "We want our purchase to result in renewables that would
not otherwise have occurred, not pay for what BPA should be doing
anyway." Salem Electric has issued a request for proposals (RFP)
for a consultant to assist it in acquiring renewables and, if it
stays with BPA, to help fashion a contract for renewable power.
The board's decision was based on customer support for
renewables that was demonstrated when nearly 100 comments were
received in response to an article in Salem Electric's
newsletter. Near the end of the article that discussed BPA's
renewable energy projects, customers were asked whether they
would be willing to pay more for renewable power. Two methods
were proposed:
- Offering each customer the opportunity to raise his or her
own rates for the amount of green power desired; and
- Raising everyone's rates by 4-8% to make Salem Electric 20-
40% green.
Over 75% of the responses, which consisted of notes written
on bill stubs as well as complete letters, supported paying more
for renewables. Of those expressing a preference for a
particular method, the majority supported the "all-in" approach.
One customer wrote, "Since everyone will benefit, everyone should
pay."
"We've never gotten that kind of response on anything," said
Weiss. "It convinced the board that our customers want us to
make a collective choice to green our system rather than leave it
to individual choice where the outcome would be uncertain. It
also goes along with the Board's thinking that renewables aren't
just a 'social obligation,' but a prudent, conservative business
decision to invest in diversity--especially in a resource with
low O&M and no fuel risk."
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