Rocky Mountain Power announced an agreement last week to buy electricity generated by Pioneer Wind Park, a controversial 46-turbine development proposed near Glenrock.
The deal moved the planned 80-megawatt facility one step closer to fruition after years of lawsuits and delays. It also signaled the end of contentious contract negotiations, which at one point saw the utility and project developer Wasatch Wind air their differences before the Federal Energy Regulatory Commission.
The Utah-based developer and Rocky Mountain Power’s parent company, PacifiCorp, said those differences were resolved in a 20-year contract to begin in 2016. Financial terms of the deal were not disclosed.
“We’re pleased that we were able to enter into a power purchase agreement with PacifiCorp and look forward to working with them into the future,” Wasatch President Christine Watson Mikell said in a phone message.
The wind farm, first proposed in 2010, still has several hurdles to clear. Wasatch needs to announce a funding plan by May 18 and begin construction by July 18 to meet the terms of its state siting permit. It is unclear where those efforts now stand. Attempts to reach Mikell for further comment were unsuccessful.
Opponents of the wind farm also signaled they may challenge the agreement in appeals to FERC and the Wyoming Public Service Commission, which regulates utility contracts.
They argued the deal comes at a time when Rocky Mountain Power is not looking for additional power, noting the utility’s 10-year plan does not call on building any new power plants or wind developments. It could also mean rates increases for consumers, they said.
Federal law requires utilities to purchase electricity from renewable power facilities that generate 100 megawatts or less, provided it doesn’t it lead to a rate increase for consumers.
“I think the Public Service Commission in Wyoming needs to take a look at its avoided cost policy to make sure it is adhering to this ratepayer indifference standard,” said Kenneth Lay, a member of the Northern Laramie Range Alliance, a landowners group opposed to the development. “Our point here is that any purchase of energy under these circumstances, where the utility has no need for incremental power, may raise costs to ratepayers.”
David Eskelsen, a Rocky Mountain Power spokesman, disagreed with that argument.
While the utility is not planning any additional plants, it could use additional power, he said. Projected demand exceeds projected supply over the next decade. The company plans to fill that deficit by buying power from other utilities, he said.
“It is too simplistic a term to say the company doesn’t need the energy,” Eskelsen said.
And he rejected the argument the deal would mean a rate increase for consumers, noting Rocky Mountain Power is required under the Public Utility Regulatory Policies Act to keep rates from rising.
The contract between Rocky Mountain Power and Wasatch is not the first accord struck by the two parties over Pioneer’s electricity. An initial agreement expired after a series of lawsuits and the bankruptcy of Wasatch’s financial partner, Edison Mission Energy, delayed the project. Striking a second deal proved harder.
Wasatch took the utility to FERC last year, arguing Rocky Mountain Power was insisting on a contract provision which would enable it to turn off the wind farm’s power. The wind developer said that was a violation of federal law and FERC agreed. But the commission also offered something of a consolation prize to Rocky Mountain Power.
The price the utility pays for wind power should reflect transmission constraints, FERC said. Effectively that meant Rocky Mountain Power could charge small-scale wind farms like Pioneer two prices: a higher price where new transmission lines are built and a lower price where they are not.
Rocky Mountain Power is in the process of permitting the 488-mile Gateway West transmission line, which would run from Glenrock to Downey, Idaho.
FERC added one final condition in its ruling, requiring the two-tiered pricing solution to be approved by the Wyoming Public Service Commission. The commission will consider that question at a hearing Tuesday. A decision to approve the tiered approach would pave the way for contracts like the one struck by Rocky Mountain Power and Wasatch to be approved in the future, said Chris Petrie, a spokesman for the commission.
The commission will decide at a later date if the Rocky Mountain Power-Wasatch contract satisfies the federal requirement that electricity bills do not rise, he said. That decision will likely be made as part of proceedings covering prices paid by consumers starting in 2016.