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Wind project recommended as addition to energy mix

Representatives of a Chicago-based consulting firm told the City of New Ulm/New Ulm Public Utilities (NUPU) Long-Term Power Committee Tuesday that a 5-7.5 MW wind energy project is technically sound and economically favorable.

At the Public Utilities Commission meeting later Tuesday, the commission gave approval to go ahead with the project.

Using Xcel Energy base power purchases with Renewable Energy Certificates (RECs), Sargent & Lundy said the proposed $10.93 million wind project would generate a $1.1 to $1.39 million operating profit over its first five years of operation (2009-2013).

The firm said there were no known fatal flaws that would reasonably prevent the project from being built and added to New Ulm’s energy generation mix.

The wind project payout was a short as 7.5 years, using the Xcel base case with RECs.

Xcel would purchase wind power at 6.67 cents/Kwh. Revenues of RECs would create another $00.75 cents/Kwh.

The turbines would project about 17,345,455 Kwh per year.

“The economics are robust,” said a Sargent & Lundy rep.

Primary wind project benefits for NUPU include avoiding purchasing power from Xcel or Heartland Consumer Power District (HDPD) and revenues from the sale of RECs from generated power.

The project is proposed to be funded with $2.98 million in Clean, Renewable Energy Bonds (CREBs) and $7.96 million in General Obligation Bonds.

Citizens Committee Appointee Jim Hogen questioned the 30-year wind turbine useful life expectancy cited by Sargent & Lundy.

Company reps said with proper maintenance, wind turbines and related components would last that long or longer.

A wind assessment by WindLogics showed the average annual wind speed at the project site is 16.59 mph at an elevation of 80 meters. The annual net (wind turbine) capacity factor was measured at 36.66 percent.

Sargent & Lundy has conducted preliminary environmental due diligence. With project approval, Phase 1 environmental studies include local, state and federal permitting.

The wind project could be operating as soon as Dec. 9, 2009.

Sargent & Lundy and NUPU met with Nicollet County Zoning officials and learned they support the project. Because it is less than 25 MW, the project would be approved by county rather than a state utility commission, Sargent & Lundy said.

Last week, City Attorney Hugh Nierengarten forwarded a Power Provider Contract for review to HCPD.

“I imagine they’ll have comments. It’s substantially changed from what they originally gave us,” said New Ulm City Manager Brian Gramentz.

“They (HCPD) wanted to deal with contract parts serially while we wanted to do it comprehensively,” said Nierengarten.

Patrick Wrase, NUPU developmental engineer, said he is working on a coal supply offer from Rio Tinto Mining and Energy of Wyoming for the Boiler No. 4 conversion.

“It’s coal shipped by rail to the Renville beet plant (that would be trucked to New Ulm). HCPD may buy it (locally-generated coal power),” Wrase said.

Last week’s Xcel transmission outage caused NUPU to fire up its combustion and steam turbines to produce more costly, locally-generated power.

Wrase said combustion turbine power costs NUPU $250/MW to produce while steam power costs $70/MW.

Wrase said he and PUC Director Gary Gleisner are addressing the added cost issue with Xcel.

By Fritz Busch
Journal Staff Writer

The Journal

26 September 2007