Foster Campbell

Louisiana Public Service Commissioner

New SWEPCO Wind Power Will Lower Bills

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Customers of Shreveport-based Southwestern Electric Power Co. will be the first in Louisiana to buy their electricity from a renewable power source as part of a statewide experiment sponsored by the Louisiana Public Service Commission. And contrary to historical trends in green power, this electricity will save consumers money rather than be more expensive than power from fossil fuels.

In December the LPSC approved a 20-year power-purchase agreement by SWEPCO with a Kansas wind farm for 31 megawatts of electricity.
Combined with a previous purchase of 80 megawatts of Texas wind power, the new Flat Ridge 2 Wind Energy agreement represents two percent of SWEPCO’s overall usage and fulfills the LPSC’s requirement in its renewable energy pilot program. It also represents enough power to supply all the households in a city the size of Ruston, based on average consumption by SWEPCO residential customers.

SWEPCO says the Kansas wind power is less expensive than power from natural gas, a major fuel for electricity generation. Renewable energy — from wind, solar or other forms of green power — has historically cost more than power from conventional sources, so this new wind purchase is a notable achievement for SWEPCO and for the Louisiana PSC. The commission adopted its renewable pilot program in 2010. It calls for the four investor-owned electric utilities operating in Louisiana to purchase two percent of their power from renewable sources, assuming the cost is reasonable. Eligible fuels include biomass, landfill gas, wind, solar, hydro, geothermal, municipal waste, combined heat and power, and fuel cells.

Besides SWEPCO, Entergy Gulf States, Entergy Louisiana and CLECO are all in various stages of fulfilling their LPSC mandate to try renewable energy.
Flat Ridge 2 Wind Energy, the Kansas wind farm, is owned by British Petroleum. It was one of 45 firms that submitted proposals to SWEPCO earlier this year as part of the utility’s LPSC mandate. Other forms of green energy proposed to SWEPCO included solar, hydroelectric, geothermal, biomass, municipal waste and landfill gas. The proposed projects were located in five states.

SWEPCO said the Flat Ridge wind power would lower customer bills in 2013 by roughly 5 cents per monthly bill for a residential customer using 1,000 kilowatt hours, and by 11 cents per average residential monthly bill in 2014. The bill reductions are modest because the amount of power being purchased is small, but when you consider that green power historically has cost more, it is noteworthy for SWEPCO and for Louisiana. It suggests that renewable energy is maturing and becoming more competitive with fossil fuels. Plus, it’s a clean American resource and not a form of energy we must import from overseas.
For these and other reasons wind power is growing across the country. According to the American Wind Energy Association, the third quarter of 2011 saw more than 1,200 megawatts of wind power installed in the United States, bringing installations through the first three quarters of the year to 3,360 megawatts.
Through the end of September, the U.S. wind industry totaled 43,461 megawatts of wind capacity.

The American wind-power industry has added more than 35 percent of all new electrical generating capacity over the past 4 years, second only to natural gas, and more than nuclear and coal combined. Today, U.S. wind-power capacity represents more than 20 percent of the world’s wind power.

Texas leads the nation with more than 10,000 megawatts of installed wind power. Iowa is second with 3,600 megawatts. As of 2010 there were large-scale wind plants in 38 states. Louisiana at this time is not considered a prime state for wind power due to our lack of strong, steady wind currents. Areas of offshore Louisiana, however, are considered good territory due to strong, consistent and humid wind patterns. Plans to develop windmills off Louisiana’s coast have included the use of dormant oil and gas platforms. A challenge for developers is transmitting the power to facilities on land.

Getting the Flat Ridge 2 wind power to SWEPCO’s service territory from Kansas will not present big obstacles due to the plant’s location in the territory of SWEPCO’s regional transmission organization, the Southwest Power Pool. Delivery of the power will follow authorized SPP routes. The Flat Ridge deal is SWEPCO’s second wind purchase. In January 2009 the company signed a 20-year agreement for 80 megawatts of wind energy from Majestic Wind Farm near Amarillo. The United States represents not only a large market for wind farms but also a market for American manufacturing and jobs. More than 400 facilities across the country make components for windmills such as towers and blades.

In mid-2010 an English company called Blade Dynamics began making advanced windmill blades at a plant in eastern New Orleans. The company hopes to have 600 employees by 2015. Until just a few years ago, Shreveport’s Beaird Industries manufactured wind towers. Unfortunately for the company and its workforce, that business fell victim in part due to uncertainty in the federal government’s production tax credit for wind power.