Montana Wind Working Group Meeting

June 10, 2004

John Guthmiller described the USDA Farm Bill 9006 grant funding program for the current cycle.  USDA has solicited applications and is seeking projects to fund.Details about eligibility, application deadlines, how to apply and the review process can be found at http://www.rurdev.usda.gov/rbs/farmbill/.  Interested parties should go to this website and click on the most common questions listed in the left margin under the question “What is the USDA Farm Bill Section 9006?”.  John highlighted some important details.  All applications must have a DUNS number since the government is now tracking all grant applications; it is no longer sufficient to use a Tax ID number.  Projects must be professionally installed.A DUNS number can be obtained by calling (866) 705-5711.  Applicants cannot do the work themselves as an “in kind” contribution toward the total project costs.  USDA funding is the last money into the project.  They will hold back 10% of the granted money until project completion.

USDA requires a review of potential environmental impacts for each project.  The USDA environmental review will typically be a Class 1 EA.  USDA’s Class 1 EA is not the same as EPA’s Phase 1 and 2 environmental review designations.  The Class 1 EA is unique to the USDA.   An onsite inspection is required to comply.  USDA’s Class 1 EA compliance is basically the completion of a USDA Form 1940-20, which is a relatively simple questionnaire.

Elliott Mainzer described the Bonneville Power Administration Wind Integration Package.  Details can be found at http://www.bpa.gov/Power/PGC/wind/wind.shtml.

BPA began its process by asking Eric Hirst to complete a study to determine the feasibility of integrating wind power into their system; that study is available on his website, www.ehirst.com.  At first BPA was looking at wind power acquisition.  With the drop in wholesale energy prices, they switched to other products they might offer to bring wind power onto their system.  They came up with two product options.

The first is “storage and shaping” services.  Through this service BPA takes wind power into their system one week and delivers it to the utility the following week based on the amount of wind power was produced the previous week.   BPA bases their delivery schedule to the utility on the previous week's average peak and off-peak generation.  BPA is attempting to be able to offer this service for an “all in cost” of $11.00/MWH.  About $6.00/MWH of this cost is the “storage and shaping” service charge and the rest is transmission, reactive power and ancillary services.  Anyone who can deliver power to the BPA system may utilize these services, however, transmission constraints and costs can undermine its usefulness.  Generally, a wind power producer would need to secure two “wheels” to employ these services.  BPA has already had a number of discussions with folks in Montana about how useful these services might be within Montana.  The difficulties in using these services within Montana are, basically, a function of transmission limitations and constraints, especially at Hatwai.Improvements underway at Hatwai will help to relieve some of the difficulties.  To make these services work in Montana you will need to buy a transmission wheel to get it to BPA’s system.  Because of the intermittency of wind, i.e., a lower power factor, this could cost about 3 times more than for a thermal plant.  Montana has limited firm transfer capacity available for purchase.

A lively discussion ensued.  One of the key areas of the discussion was “How can we lose the two ‘wheels’ here in Montana?”.   Dave Ryan suggested the possibility that imbalance or dynamic scheduling where interchange schedules are kept flat and volatility is addressed within each hour could be used.  Elliott noted wind developers are still responsible to schedule his/her power and so are still exposed to imbalance penalties.  He also pointed out WSCC rules require firm transmission and observed you want to keep wind developers “on the hook” for scheduling without penalizing them through severe imbalance penalties.  Wind producers must be realistic in scheduling their power to prevent problems from developing in the system.  California has chosen to have the ISO schedule wind in an aggregated manner so that variations in output from individual wind projects can be dampened by other projects in different locations.

Through its second wind integration service, BPA will take wind power into their system from their public utility customers who have direct connections and use it within their system, basically swapping BPA power out for wind power.  BPA offers this service for $4.50/MWH.   However, many Montana consumers are not connected to their control area; they receive BPA power through a General Transfer Agreement (GTA).  It is not easy to regulate around these loads.Of course, a Montana utility could develop and offer a service similar to BPA’s within the state.Gail Kuntz promised to supply a list of BPA’s Montana customers who get power directly from BPA and those who use a GTA.  Here is the list of Montana rural electric coop customers served by General Transfer Agreements (GTAs):  Vigilante Co-op, Ravalli County Co-op, Missoula Co-op, Glacier Co-op, and Northern Lights Co-op.  Paul Cartwright explored possible resources in Montana that BPA might be able to use to regulate around wind power in Montana.  He suggested Hungry Horse and Libby Dams and Colstrip power as potential regulating resources BPA could use.  Elliott said he was not sure what potential those resources held.  BPA is interested in is trying to work out a means for making this service for existing BPA customers who are served through a GTA.  Elliott suggested we should arrange another conference call to begin to look into ways to make this happen.  In preparation, the MT WWG should identify who might be interested in participating in these discussions and articulate the issues we would like to have addressed.

In the future, we should first contact Gail Kuntz, (406) 449-5790, with any questions we might have about these services and applicability in Montana and she will involve Elliott and C.T. Beede, the BPA account executive for power sales in Montana, later if that is necessary to provide a complete response.

Timlynn Babitsky reported the North American Rural Futures Institute, NARFI, has made a substantial commitment to help bring wind power to Montana, through ag-outreach and grass roots mobilizing.  Before NARFI got started on the Hi-Line, local folks reported that wind power did not work for Montana.  Now, economic development organizations on the Hi-Line have included wind power in their long-range strategic planning document, local stakeholders are attending the Minneapolis Community Wind Conference in June, and Hill County Electric Co-op is putting on a wind power seminar in July.  NARFI is preparing a step-by-step “Blue Print,” for small wind development.  The Blue Print is a big agenda. Many folks have contributed materials for inclusion in the Blue Print; their contributions have been appreciated.  NARFI thought a conference on small wind development would be the most useful presentation for the Blue Print.  While moving in that direction, the Colorado conference in mid-April presented exactly the right step-by-step format for wind projects.  It was an excellent presentation of the steps small wind projects need to follow.

(See: http://www.state.co.us/oemc/events/cwade/2004/agenda_day1.pdf [mostly wind] and http://www.state.co.us/oemc/events/cwade/2004/agenda_day2.pdf [other renewables and distributed generation.)

The Montana Farmers Union April conference was another good small wind project-focused conference and the Harvesting Clean Energy conference will also cover small wind power projects in Montana.  Rather than develop yet one more conference, NARFI chose to throw support toward the conferences already in play and refocus efforts toward on-line tool development.  There are many excellent on-line resources for small wind projects on both Montana, regional and national websites.  Navigating through all those resources can be overwhelming.  The Blue Print will be presented as an on-line decision tree, which steps small wind project developers through the process.  At each decision point, a click will lead to a separate set of resources that provide the precise information related to the choice the user makes.

In response to a lot of negative comments floating around about Montana’s rural electric co-operatives (RECs) non-support for wind power, NARFI is also currently conducting an in-depth survey of Montana’s RECs.  The three main goals of the research are 1) to accurately determine what the issues are that co-operatives face regarding wind power projects seeking to hook into their systems; 2) to assess the similarities and differences between Montana’s RECs in renewable energy project policies, and application/approval processes; 3) to compare Montana RECs with RECs in other states on the same issues.  The research is a four phase plan aimed at opening a constructive, non-adversarial dialog between the electric co-ops and wind activists/developers in Montana.  NARFI is maintaining a neutral position in this research, seeking to get issues on the table on both sides, so common ground can be uncovered.  Phase 1 of the research is complete.  Timlynn handed out a copy of the draft.  Bob Quinn asked the group whether net metering legislation would be needed to get the cooperatives to purchase small wind.  Timlynn responded by saying she believed that legislation would be too confrontational; to make any progress will require looking at all the issues rather than mandating compliance in an adversarial environment.  She noted that so far the in-depth interviews with each of the 26 RECs have found that most Montana RECs would be interested in exploring wind farm development to serve their customers – these findings are tentative and anecdotal.  More information about NARFI and its efforts to promote wind power in Montana,  Phase 1 results of the research on Montana’s electric co-operatives and their small wind development “tool” can be found at http://www.narfi.org .

Livingston is putting together a coalition to address wind development, a 2 MW project, which involves the city and county and Bob Julian/Mike Costanti.

Peggy Beltrone and Mark Lindberg reported on the Rocky Mountain Area Transmission Study (RMATS) meetings they attended since our last meeting.  RMATS is ahead of the other groups studying transmission in the west.  MT WWG should be aware that meeting summaries and presentations are available on the web and we should include their link, http://psc.state.wy.us/htdocs/subregional/home.htm, on our MT WWG site.  Peggy was “volunteered” to help edit the group’s report.  A draft has been prepared.  Peggy indicated she will hold firm on the need to address the fact Montana may pay more for power if the transmission constraints are removed.At the same time, there is no assurance any new generation would be built in Montana.This stems from constraints “trapping” power in Montana and Wyoming, putting a downward pressure on power costs, while they keep power from other areas of the west, driving power costs higher.  The tradeoff from removing transmission constraints in Montana is potentially higher power costs compared to greater power generation development opportunities.  Peggy believes strongly Montanans should be well informed about this tradeoff before publicly endorsing transmission additions.  Bob Anderson commented that predicting future prices is a slippery slope since the power system is so complicated.  He observed you can draw opposite conclusions with excellent analysis.  RMATS is still an excellent exercise and may afford transmission investors with the confidence they need to build projects, BUT nothing may happen also.

Mark Lindberg indicated Montana could get another 500 MW on the existing Colstrip lines by adding some substations and capacitors and additions are underway at Hatwai to resolve the constraint there.  There is a question about whether there is room in the corridor through Missoula for another transmission line and so an alternative corridor south to Midway is being assessed.  There will invariably be winners and losers in anything that is done.  Mark noted there is another wind project, 50 MW, proposed north of Glasgow.  The project has 26 miles of transmission associated with it and it ties into the Western Area Power Administration (WAPA) system.  Mark alerted us to two resolutions that will be proposed at the Western Governors Association.  They can be found at www.westgov.org.  Mark also indicated that Montana is very close to seeing a transmission connection to Lethbridge, Canada.  It will add 400 MW of capacity.

Windpark Solutions recently received a “Finding of No Significant Impact” at their project site near Judith Gap.  This clears the environmental regulatory hurdle.  Bob reported his project depends on re-authorization of the Production Tax Credit (PTC).  The PTC is beginning to move forward.  It has passed the Senate and must be approved by the House of Representatives.  Difference between the two versions of the bill would then need to be addressed in a conference committee.  Montana’s entire Congressional delegation strongly supports the extension of the PTC.  Windpark Solutions still does not have Power Purchase Contract with Northwestern Energy.  Bob said many things have changed since their bid was originally submitted that necessitate fresh discussions with Northwestern Energy.  Bob said the PSC is seeking comments on Northwestern Energy’s default supplyportfolio and holding a series of public hearings.  He observed comments have focused on why more wind isn’t in the default supply portfolio.

Jim Carkulis reported the 9 MW wind project near Great Falls will be operational in October or November 2004, with or without the PTC.

John Healy, Fort Belknap, has broadened his role with the Fort Belknap tribe from transportation planning to include wind power development.  Tony Jimenez from NREL stimulated this change by offering the tribe an opportunity to participate in the anemometer loan program.  Fort Belknap installed one anemometer on the reservation and has established a second site.  Wind power development has now become part of the tribe’s strategic planning process.Fort Belknap is looking at 10 kw Bergey turbine installation that would be similar to the ones done at Browning, Stanford, and Chester.  As a mid-range goal, Fort Belknap wants to move to tall, 50m, tower anemometers.  Fort Belknap will be setting up a wind energy curriculum for the tribal schools and the college.

Over the past several months, members of the MT WWG have been encountering wind activities and wind services providers about which we were not unaware, e.g., the Martinsdale Colony is refurbishing used wind turbines for Dave Healy so they can be sold and installed within Montana.Pete Wipf reported the colony also recently erected seven turbines at Two Dot for Dave.  The group felt it was important to knit these providers and activities into our wind energy network.  The MT WWG suggested the Montana Renewable Energy Association (MREA) was the most appropriate place to incorporate these activities and providers.  Members should get information to cathys@ncat.org when we learn of it.She is responsible to maintain the MREA site.

Van Jamison reported the PSC is currently considering Northwestern Energy’s “avoided cost” for qualifying facilities’ contracts in Docket 2003.7.86.  In addition to the price Northwestern Energy will be asked to pay qualifying facilities, issues in the proceeding include size limitations on qualifying facilities that would be eligible for the standard rate, who owns the “attributes” or Renewable Energy Credits, and the length and other terms of the standard qualifying facilities’ contracts.

Chris Christiaens, Montana Farmers’ Union, has arranged a wind power briefing for legislators during the first week of the upcoming 2005 session.  The Montana Association of Counties will have a one-hour session on wind and rural economic development at its annual meeting in Missoula on September 28^th from 1:15pm to 2:15pm.  The National Renewable Energy Laboratory will sponsor a booth at the MEA-MFT annual convention to distribute materials to help teachers incorporate wind energy into their science curricula.

Mike Sullivan, Peggy Beltrone and Kathy Montgomery reported agenda planning for the January “Harvesting Clean Energy” Conference is proceeding well.  “Reserve the date” cards are being mailed out.  Additional conference sponsors would be welcomed.