July 12, 2012
Idaho

Idaho Power says adding more wind to its system will cost more money that someone has to pay

By ROCKY BARKER | Idaho Statesman | www.idahostatesman.com 12 July 2012

As the percentage of wind power in Idaho Power’s system grows, the cost of melding the intermittent power into the region’s electric grid rises as well.

The company has to balance its existing 500 megawatts of wind with hydroelectric, coal and natural gas generation, said Mark Stokes, Idaho Power’s manager of power supply planning, at the Northwest Power and Conservation Council on Wednesday.

The company has another 300 megawatts of wind power under contract and expected to come on line later this year, which the system can handle, Stokes said. But it comes at a higher cost to Idaho Power than the developers paid the company under the contract to integrate it into the system.

When wind power hits 1,000 megawatts and above, the cost of integrating that power explodes, and the utility isn’t certain it can operate its system without forcing some wind plants to shut down. Incorporating more wind power would dramatically increase Idaho Power’s costs because it would limit the company’s ability to use its low-cost hydropower.

Adding wind power to the system does little to help this time of year, when people are running their air conditioners constantly and farmers are pumping thousands of gallons of water on their crops. But it also doesn’t hurt, because the demand on the system is high, Stokes said.

On Monday, when temperatures in Boise reached 108 degrees, Idaho Power’s overall peak-hour average load topped 3,207 MW, just short of setting a record.

Idaho Power has plenty of water in its Hells Canyon reservoirs this year to offset the quick rises and drops in power that are added and subtracted to the system when the wind blows and dies. But in a short water year, the utility has less flexibility to balance out the rise and fall of wind power.

“The type of water year we have affects how we can integrate the wind,” Stokes said.

But when the Hells Canyon dams are balancing out the more expensive wind resource, it reduces the ability to use the lower cost hydropower, he said.

“It essentially de-optimizes the value of our hydro,” he said.

The hardest time for integrating wind is in low-demand months, such as March. That’s when wind production is high, and the spring runoff makes hydropower production high, too.

Power suppliers need to have as much power being used as being produced to keep the system working.

Idaho Power pays wind producers about $43 per megawatt hour for the power they produce under contract. But they have to take $6.50 per megawatt hour off that to meet integration costs. Stokes estimated the integration costs to Idaho Power at 800 MW of wind power on the system would rise to $8 per megawatt hour. At 1,200 MW of wind power in the system, that cost would rise to $19 per megawatt hour.

Idaho Power’s customers would have to eat those costs if the existing contracts aren’t reopened or new contractors don’t pay the additional costs.

Peter Richardson, an attorney who represents wind power producers, said the idea that existing contracts would be reopened is “laughable,” since developer financing is already set. And forcing new developers to pay the costs caused by existing contracts, he said, “is charging them for something they’re not causing.”

He’s skeptical of the cost estimates and said the Bonneville Power Administration, the agency that markets the power from the Northwest federal dam system, has been able to integrate a higher percentage of wind than Idaho Power. But several council members said BPA has more ability to sell power elsewhere through more transmission outlets, making integration easier.

Idaho Power’s ability to integrate wind will increase when it builds a planned transmission line from west of Boise to the Columbia River sometime around 2017. Idaho council member Jim Yost said the question of who will pay is a major issue.

Demand for electricity in the Northwest continues to recover from the recession of 2008, growing by about 1.2 percent per year over the last two years, according to an analysis by the council. It shows that 81 percent of that increased demand was met with improved energy efficiency, which reduced the need for power from new generating plants.

URL to article:  https://www.wind-watch.org/news/2012/07/12/idaho-power-says-adding-more-wind-to-its-system-will-cost-more-money-that-someone-has-to-pay/