Electricity-marketing agency buys more wind power

A federal agency that markets electricity generated by water projects such as Missouri River dams is increasing short-term partnerships with wind farms in the Dakotas and might someday become an even bigger potential buyer for wind developers in the two states.

The Western Area Power Administration has been working with the Army and the Interior Department on a study of integrating wind and water-based power. The study, which is not yet available to the public, will recommend that Congress authorize a long-term demonstration project, said Jody Sundsted, power marketing manager for WAPA's Upper Great Plains Region.

Details have not yet been worked out. "It could be a long-term power supply arrangement with a tribal wind farm operator or it could be that we operate it, but it will ultimately be up to Congress," Sundsted said.

The project could provide more information on the economics of integrating the two types of power. Developers say any increased involvement by WAPA in the wind energy market would be welcome.

"Any time there are customers who publicly support and are looking to purchase wind power, that's a good thing," said Steve Stengel, spokesman for Florida-based NextEra Energy Resources. "We're in the business of helping customers meet their energy needs and ... we have customers who are interested in wind power."

NextEra has more than 8,000 wind turbines across the country, including turbines in the Dakotas that produce more than 600 megawatts of power, with more under development. One megawatt is enough to power 800 typical residential homes.

WAPA, one of four such agencies within the U.S. Department of Energy, sells power to nonprofit providers such as governments, rural electric cooperatives and American Indian tribes in 15 central and western states, from California to Minnesota. When it cannot fulfill its contracts with hydropower, it must buy electricity on the open market.

The situation has been exacerbated in recent years by prolonged drought in the Missouri River basin, which has lowered the level of reservoirs such as Lake Oahe in South Dakota and Lake Sakakawea in North Dakota to record lows. The reservoirs behind the dams rebounded this year, but Sundsted said hydropower generation has not yet returned to normal.

Sundsted said some of the power WAPA buys on the open market might be wind-generated but the agency does not determine the source. However, the agency has begun entering into direct partnerships with wind projects as the opportunities begin to present themselves.

"It's a little unique when we do buy from a wind farm," Sundsted said. "We don't have any mandate for wind power but the Department of Energy and Western support renewables. If it fits in with our economics of power supply, I think it's a good deal."

WAPA late last year signed a three-year contract to buy up to 50 megawatts of wind power annually from North Dakota-based Basin Electric Power Cooperative. The contract begins in January. Basin, which supplies 136 member rural electric systems in nine states, gets most of its supply from coal- and gas-powered plants but is involved in wind projects throughout the Dakotas.

WAPA and Basin are close to inking a second deal for up to 100 megawatts of wind power annually for three years, from a wind farm in northeastern South Dakota that also involves NextEra and the East River Electric Power Co-op. The power marketing administration also is negotiating with Just Wind, a company with offices in North Dakota and Minnesota, for another 100 megawatts of power per year over five years, Sundsted said.

"We have folks come in quite often and talk to us about proposals," he said. "We're just trying to get our portfolio to a mixture of things that make sense (economically) to us."

The American Wind Energy Association has identified the Dakotas as one of the most promising areas in the country for wind development. South Dakota Public Utilities Commissioner Steve Kolbeck said that as wind projects increase, the market for that power also will need to grow.

"WAPA getting into that game is a very large step," he said.