July 27, 2012
Wyoming

Wyoming seeks California, Colorado wind power buyers

By JEREMY FUGLEBERG Star-Tribune business editor | trib.com 26 July 2012

Wyoming officials have started a campaign to sell Wyoming wind to California and are preparing a similar sales pitch to Colorado.

Both states want electric utilities to provide a percentage of their power from renewable sources, such as wind. Officials in Wyoming, home to an abundant and oft-cursed supply of wind, aim to get a piece of that action through an “outreach effort” kicked off earlier this year, said Loyd Drain, executive director of the Wyoming Infrastructure Authority.

Drain and others are trying to convince California that while Wyoming’s wind power might be far off, it’s still a bargain.

The Wyoming ambassadors have yet to gain an audience with California Gov. Jerry Brown, but the state’s representatives are making the rounds.

“We’re working out way through the maze, and we’re confident that at some point California will embrace what we’re trying to do,” Drain said.

California, home to almost 38 million people, is the big prize. The state’s set an aggressive standard for renewable energy use, known as a renewable portfolio standard. The Golden State’s guidelines require that one-third of its energy must come from renewable sources by 2020.

But California has shown a reluctance to accept renewable energy from out-of-state suppliers, aiming to fuel the state’s own economy and open in-state jobs.

However, California’s stance may be softening, as leaders there realize they might not be able to meet all of the demand through local sources, said Shawn Reese, policy director for Wyoming Gov. Matt Mead.

That could spark a change in Wyoming tax burden on wind projects. Wyoming lawmakers may be more willing to revise Wyoming’s wind energy tax, the only one of its kind in the nation, if the state proves it can sell its renewable energy in the lucrative California market, he said.

“But I think there needs to be more of an indication to comfort many legislators that California is an open market,” Reese said.

Dave Picard is a lobbyist for the Wyoming Power Producers Coalition, which represents independent power producers in the state including many wind farm developers.

He’s less optimistic that lawmakers will revise the state’s wind taxes to make them more favorable to the industry.

But given the ongoing issues related to transmission and the California market, there’s still time to find a tax structure that works, he explained.

“It doesn’t mean you have to rush into the 2013 session and say the sky is falling if we don’t change the tax structure,” he said. “Changing the tax structure is not going to create a rush to develop Wyoming wind.”

For now, Wyoming’s on the outside looking into the California market, trying to convince utilities and officials in the state that the Cowboy State has the wind power California needs to meet their renewable portfolio standard.

Drain says he’s confident Wyoming can make its case by focusing on cost. While California wants to supply its own renewable energy, and could very well supply its own needs, it’s hobbled by its arduous project permitting process that boost the cost of projects.

“It’s ironic they have such stringent permitting and siting regulations,” Drain said. “Sometimes they’ve been literally impossible to build – renewable facilities in California.”

A publication released last year has proved to be the lynchpin of Wyoming’s claim to inexpensive wind energy. The Western Electricity Coordinating Council, a regional group charged with coordinating electricity and power reliability in the West, released its 10-year regional transmission plan in September 2011.

The Wyoming Infrastructure Authority dredged a key set of numbers from the plan: If California met 20 percent of its demand for renewable energy, it could save $600 million.

“We’ve really gotten a lot of mileage off of that, and it’s certainly a quality independent analysis that has helped in that outreach effort,” Drain said.

The WIA is also funding studies to show Wyoming’s wind blows strongly at differing times of the year from California sites, providing Wyoming’s wind can complement those of the Golden State.

Another key part to the sales pitch is the emergence of additional transmission line capacity to Wyoming’s constrained power lines.

Several projects are specifically aimed at moving newly generated Wyoming energy out of the state, including the TranWest Express and Zephyr projects to the Las Vegas area, the High Plains Express to Phoenix, and the Wyoming-Colorado Intertie to Denver.

The projects’ in-service dates are still several years away at minimum, but they’re on their way.

“Without a doubt, after all these decades, I see high voltage transmission finally getting built,” Drain said.

California isn’t the only target. Colorado has it’s own renewable portfolio standard – 30 percent of its electricity by 2020 – making the neighboring state an attractive target for developers of Wyoming wind energy projects and transmission lines.

“We’re starting to do some outreach in Colorado and to build a value proposition for Colorado,” Drain said.

The authority has commissioned to National Renewable Energy Laboratory to conduct a study that will illustrate the value of Wyoming wind to Colorado customers and the state’s economy, specifically if wind turbines bound for Wyoming wind projects are purchased from Colorado factories.

“What we’re tying to show is that, ‘Hey, projects build in Wyoming aren’t just beneficial to Wyoming. They can also be beneficial to the state where the power’s sold,’” he said.