North Dakota’s Public Service Commission rejected Xcel Energy’s request to charge a special rate for wind power, saying it was too expensive and could mislead customers about the cost of wind-generated electricity.
“Why should people who really support wind have to pay significantly more for that resource than others?” asked Susan Wefald, the PSC’s president.
Xcel Energy’s Windsource program, which it already offers in Minnesota, Colorado and New Mexico, sells wind energy by 100 kilowatt-hour “blocks” to customers who want assurances they are using environmentally friendly power.
The Minneapolis utility asked the PSC for permission to charge North Dakota customers a premium of $2.50 per 100 kilowatt-hours for a supply of wind energy. A typical residential customer uses about 750 kwh each month.
Xcel has about 85,000 electric customers in North Dakota, most of whom live in Fargo, West Fargo, Minot and Grand Forks.
Wefald and Commissioners Tony Clark and Kevin Cramer unanimously voted to reject Xcel Energy’s proposed wind-power price on Wednesday, saying it was too expensive. The proposed North Dakota price was more than double what Xcel charges Colorado customers for the same program, Cramer said.
Clark said special rates for wind power, which may have been justified a decade ago, look dated in an era that now considers wind energy a mainstream source of electric supply.
“The problem with this tariff is, it treats wind as if it’s some sort of boutique fuel that’s set aside from the rest of the generation grid,” Clark said. “It sends the message that (wind energy) is more expensive to bring online than any other form of power.”
Dave Sederquist, a senior regulatory and finance consultant for Xcel, said the company was disappointed in the commission’s decision.
The company’s proposed wind-energy rate reflected the current costs to supply wind power, and its proposal left open the possibility the rate would decrease along with wind energy costs, Sederquist said.
“We believe this program would have resulted in more wind turbines in North Dakota, so it is unfortunate that the rate will not be offered (in North Dakota) to customers who want this choice,” Sederquist said in a statement.
Clark said the program did reflect the rising cost of putting up wind turbines. Construction costs to generate every form of energy have increased dramatically, he said.
“The problem is, this sets aside wind and says, ‘Here’s the cost of bringing on new wind,’ and then asks people to pay for that, when it may not be an accurate representation of both the benefits and negatives,” he said. “Wind makes sense as part of the (energy) portfolio. It doesn’t make sense on its own.”
By Dale Wetzel
Associated Press Writer
5 April 2007
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