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Austin Energy working on two, possibly three, wind farm PPAs

Austin Energy said Friday that Austin’s city council has authorized the municipal utility to negotiate two 25-year power purchase agreements with coastal wind farm operators.

The deals would be a 200-MW PPA with Duke Energy Renewables for a planned wind farm in South Texas’ Cameron and Willacy counties, and a 91-MW PPA with MAP Royalty for a project in Webb County, Texas.

Duke’s Los Vientos project and MAP Royalty’s Cedro Hills project are both expected to begin commercial operations by the end of 2012, said Austin Energy spokesman Carlos Cordova.

Final PPAs with the two developers should be in hand sometime in September, he said, adding that the muni very likely will pursue another 200-MW wind PPA later this year with a developer he declined to identify that is working on a coastal wind project near Harlingen, Texas.

Cordova said that the developers of all three projects offered long-term power prices of between $37 and $42/MWh, which is comparable to natural gas-fired power and considerably lower than what wind developers were offering before the economic downturn that started three years ago.

Because the three projects are along Texas’ coast, they typically generate power more reliably during peak-demand periods than West Texas wind farms, and face none of the transmission-congestion problems that have plagued West Texas facilities, he said.

The three projects were among over 300 proposals for wind and solar projects that Austin Energy received from 72 respondents to the muni’s solicitation for renewable energy, Cordova said. Bidders offered wind power at between $32 and $130/MWh, he said, and offered solar power at between $90 and $250/MWh.

Cordova said that if, as expected, Austin Energy negotiates PPAs with Duke, Map Royalty and the developer of the second 200-MW wind project, more than 30% of the utility’s generating capacity would be renewable in nature by early 2013 – just shy of the muni’s goal of 35% renewables by 2020.