Wyoming is facing a wind boom, and a host of proposed farms are creeping closer to harnessing power from the state’s brutal gales.
Right now, major utilities and private developers are on a short timeline, looking to take advantage of federal subsidies that make wind highly profitable and are set to expire soon.
Small developers, meanwhile, are hoping to ride in on the coat tails of the wind boom.
Rocky Mountain Power, the largest utility in Wyoming, had 20 small projects from various companies, some wind, some solar, by mid-year each hoping for a contract.
One such small project, the Boswell Springs wind farm proposed in Albany County, recently secured a 20-year contract with Rocky Mountain Power and permitting from the state’s Industrial Siting Council. It plans to raise up to 170 turbines before 2020.
The rise in wind interest has stoked frustration from some who have long been skeptical about the way small renewable developers get a piece of the power pie in Wyoming. It comes down to a federal law.
The Public Utility Regulatory Policies Act requires utilities to buy power from any producers if they meet a handful of requirements, the key provision being size. Little farms get an in, via this law, to a monopolized electricity market. State provisions dictate the length of the contracts, currently 20 years in Wyoming, and how much the small developer gets paid for its power.
In the case of Boswell, the whole project is too large to qualify. So it’s qualifying in pieces, each separated by a mile buffer.
Critics argue that farms like Boswell are bending the intent of the law, using it to qualify a large wind farm for this federal helping hand. They also say a niche market has cropped up around wind, with investors proposing farms that aren’t needed for the electricity grid, securing long term contracts using the federal provision and then selling the project off to another developer. And in a state that is already conflicted about more turbines on the landscape, why does Wyoming have to embrace these farms that aren’t necessary, they argue.
Rocky Mountain Power is currently seeking new wind power, but the utility would prefer to get their power where and when they want to rather than be forced into a contract from developers who pop up. Meanwhile, some in Wyoming remain unconvinced that these small facilities pose much of a problem, at least not yet. There’s not enough of these small companies to cause a problem, and not enough transmission to spur more, they say.
Boom time coming
Wyoming wind is calling to those who want to make it big in the growing industry.
“The entire industry is going to see a rapid build out,” said Jonathan Naughton, director of the Wind Energy Research Center at the University of Wyoming.
With the looming deadline on the federal tax subsidies, there is a rush to get wind development started, he said. And there are other factors, particularly in Wyoming, contributing to the coming wind boom.
Transmission capacity to link Wyoming power to other markets is opening up for the first time in about eight years. And the cost of developing wind is falling rapidly. In areas with really good wind resources, like Wyoming’s wind alley, building a wind farm would be the cheapest investment by far, according to a recent Lazard study, an annual report of how much developers spent to build various power plants over the previous year.
Wyoming likely would have seen this build out anyway, according to Naughton. The difference is developers are in a rush that will be followed by stable growth, if not a lull, he said.
Some argue that the current flush of development, instigated by federal tax subsidies, is like an open season from small developers that aren’t necessarily needed in Wyoming.
Some are in it to harvest federal tax credits and move on, and federal law allows them to do that, said Kenneth Lay, a local landowner with a long history pushing back on the federal law.
Lay is one of a host of landowners from the Northern Laramie Range Alliance, a roughly 900-member organization that has taken issue with the federal standards in recent years.
And they are responding to the current wind build out with renewed criticism of the status quo.
It’s a diverse set of people, with myriad concerns about wind development. One of their key issues with projects like Boswell is that it is actually a large project, but qualifies for the federally mandated contract with RMP because it breaks the farm into parts, each separated by a one-mile buffer. That’s where the argument about “gaming” the system proves true, Lay said.
There’s simply a lot of distrust for these small developers.
Head of development for Alterra Power Co., the firm developing Boswell Springs, declined to be interviewed for this story.
State law does look at the small wind contracts, and the utility determines a cost that isn’t greater than it would procure from its own resources like coal and wind, also according to federal law.
But many are unconvinced that the avoided cost approach is working. The cost of wind power is falling every year, said Lay from the alliance, and these farms are getting a 20-year contract whether or not the utility wants or needs that power.
Utilities share some of the landowner complaints about the small farms.
Rocky Mountain Power recently pushed to reduce the contract period from 20 years to three years. Small developers said they couldn’t do business without the long-term contract.
It ended in a stalemate, with regulators asking the two sides to work together on a solution. So far, a compromise has not been broached.
The Office of Consumer Advocate, which steps into rate cases on behalf of the general public, agreed that the contract length should be shortened, but not by so much.
“We just threw up our hands,” said Administrator Bryce Freeman.
Each side was entrenched in its argument, and nobody would budge, he said.
Lawmakers in Wyoming recently considered changing the contract length, and addressing some of the additional costs that should be factored into the contract, but that bill proposed by Sen. Cale Case didn’t make it far in the interim session.
For Freeman there are problems with the federal law, and the way the state handles it. But it hasn’t been much of an issue in terms of its impact on regular rate payers, he said.
“It’s not a big worry to me at this point, it could be depending on how things develop,” he said.
Freeman doesn’t believe the current transmission capacity in the state would lend itself to a big push from small developers. There still just isn’t enough room to get power out, he argued.
Are they gaming the system? Sometimes, he said.
Seen it all before
Lay witnessed what he says was a Boswell-type project crop up in his backyard. The Pioneer Wind Park east of Casper was originally proposed to be a larger farm selling its power competitively. Then it went after the federal qualification to get a guaranteed contract and secured what Lay says was a deal for its wind generation that was more expensive than what the utility would have produced on its own.
That increased cost trickles down to ordinary rate payers, he says.
The pushback on Pioneer from landowners like Lay was successful in a way. It pared the farm down to one small facility that qualified for the federal boost. But the problems with the law remain, he said.
He hopes that the wind build out brings change. It may, but the boom is happening fast and politics can be slow.
There is current talk in Washington about amending the federal law, which was written as part of an energy-independence push after the Arab Oil Embargo of the 1970s. Seventeen congressmen sent a letter to the Federal Energy Regulatory Commission in October asking for an update, particularly addressing the one-mile buffer provision. Others have proposed legislation to overhaul the law.
These are good signs for Lay.
“I think everyone realizes that (the federal law) long ago outlived its purpose,” he said. “I hope that shortly, we’ll be beyond all of this.”
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