Thursday, April 5, 2012

Wind: Get ’er done!

Posted on Thu, Apr 5, 2012 at 4:00 AM

The opinions expressed in the March 22 Independent regarding the extension of the wind energy Production Tax Credit and the status of wind power development within Montana were apparently based on limited knowledge (see “Etc.”).

It’s clear the impasse in Congress is systemic and not limited to the wind energy Production Tax Credit. Almost nothing seems to be able to “muster enough votes to pass” this Congress. “Why the impasse?” confounds nearly every American; it’s beyond me too. Fortunately, Montana’s senators are working hard to get an extension of this important incentive approved.

The dysfunction in Congress does matter. Suggesting congressional failure to extend the tax credit “may not make much of a difference” in Montana is naive and factually wrong. Montana’s wind energy industry has not “reached a plateau.” Wind companies are spending millions each year to develop projects within Montana. About 3,000 megawatts—a potential investment of $6 billion—is being actively pursued by various developers in the state. Gaelectric alone has 1,900 megawatts in its Montana project pipeline.

Wind-power development is not currently limited by transmission capacity on its existing lines. We do “have the transmission lines to get the power to markets that need it.” Gaelectric recently reserved enough space on existing transmission lines to move 510 megawatts from new wind power projects in Montana to market—a “firm” transmission pathway that would double wind generation in Montana without new wires.

Power demand nationally dropped during the recent recession, but it will rebound as the economy improves. Making policy decisions on questionable market projections has a dubious history here. Montana deregulated its electricity industry when experts suggested market prices would stay low indefinitely and customers would save compared to buying rate-based supplies. Experts told the 2009 Legislature that natural gas prices would stay high for the “foreseeable” future. Natural gas prices were about $10 a dekatherm at the time. Two months later, natural gas was trading at record low prices. Today, natural gas sells for about $3 a dekatherm and those same experts are predicting natural gas prices will stay low in the future. Go figure!

The “energy oversupply issues in the Pacific Northwest” that “forced Bonneville Power Administration to curtail 350 megawatts of wind energy generation last spring” were the result of record runoffs and wind projects being concentrated along the Columbia River, where they were all subject to the same wind and weather patterns. Wind production along the Columbia River and hydropower production from spring runoff peak at the same time—they do not complement one another. By comparison, Montana wind production peaks in the winter months; fortuitously, it complements the hydropower production in the Pacific Northwest.

Montana wind is much more attractive to utilities than more wind production along the Columbia River. Montana wind has a “geographic” advantage and adds value to the generation mix. Montana wind projects are significantly more energetic than other wind projects in the West. According to studies done for the state of Wyoming, Montana can produce wind power at a lower price than any other western state, including Wyoming. Public Service Commissioner Gail Gutsche recently wrote that electricity from Spion Kop, a wind farm south of Great Falls, “will cost less than Northwestern Energy’s share of electricity from the coal-burning facility at Colstrip. In addition, electricity produced at Spion Kop is lower than the average cost of electricity available on the market since 2000.” Power from the Judith Gap Wind Farm is even cheaper.

Wind power is just beginning to make an impact on Montana’s economy. Getting Congress to overcome the gridlock and extend the Production Tax Credit now is vital to Montana’s economy and our nation’s energy security. Let’s “get ’er done”!

Van Jamison



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