NOTES FROM OCTOBER 28, 2004 MONTANA WIND WORKING GROUP MEETING
Van Jamison reported on the meetings which we have attended and made presentations on wind power. They included the MEA-MFT Annual Convention, the Montana Association of Counties Annual Convention, and the Broadwater County Farm Bureau meeting. Wind power will also be on the agenda at the upcoming Montana Farm Bureau convention and the Montana Stock Growers Cattlemen’s College.
Wind power will be a substantial part of the Harvesting Clean Energy Conference scheduled for Great Falls on January 20 and 21, 2005. Anyone interested in exhibit space at the Harvesting Clean Energy Conference should contact Kathy Montgomery with the Montana Department of Environmental Quality. Twenty spaces are available and about ten are left.
The Montana Wind Working Group will help to organize a “Wind for Legislators” session on the second night of the Legislative Session, January 4, 2005. Currently, the session is planned to be held in the Old Supreme Court Chamber, Capitol Building, and will last for approximately 1.5 hours. Jason Bronec, Glacier Electric Cooperative, has already expressed a willingness to present. In addition, the National Renewable Energy Laboratory and Wind Powering America have committed to expert presentations in subject areas the planning group and the Montana Wind Working Group identify. Chris Christaens, Paul Williamson, Paul Cartwright, Peggy Beltrone and Van Jamison will start to put together a list of topics to be addressed at the orientation session and circulate it amongst the Wind Working Group for comment and input. Larry Flowers suggested the following topic areas - wind economics, utility myths, policy options, rural economic development impacts, also information on the regional power situation so legislators can see how wind can play into the power equation. Other ideas for topics for this session emerged from the Wind Working Group’s discussion of legislative priorities.
Larry Flowers reported that Montana continues to be a priority state for the Wind Powering America Program – a state with a great wind resource, but one that hasn’t developed this potential. Wind Powering America has initiatives underway in Montana targeting Federal Power Authorities, tribal outreach and assistance on the Fort Peck, Flathead and Northern Cheyenne reservations, working with neighboring states, and facilitating wind development on state and federal lands. Larry indicated a federal draft EIS on wind development has been prepared by the Bureau of Land Management. Wind Powering America feels very good about this assessment which seems to be fair to wind.
There will be three more rounds of the Section 9006 Farm Bill funding. There is lots of interest in this program across the country. In the most recent round of funding, Minnesota ran away with the “bacon” once again. Larry suggested members of the Montana Wind Working Group should review the new, proposed rules implementing this program and may wish to make comments on improvements to the current design.
Wind Powering America has been trying to develop a model approach to facilitate urban schools and local governments purchase of “green tags” to promote wind development at rural schools. In Colorado is required the use of an intermediary. Community Energy is serving this function in Colorado.
Wind Powering America is exploring the nexus between wind energy and water conservation – the Department of Energy has planned a strategic meeting on this topic. The meeting is scheduled for November 15th and Bob Julian, a member of the Montana Wind Working Group will be participating. The meeting will include discussions of how wind power development might be linked to coal bed methane, irrigation, and pumped hydro.
Larry encouraged utility members of the Montana Wind Working Group to become active in the Utility Wind Interest Group (UWIG) organization. Their website is www.uwig.org. Presently, no Montana utility is participating although Basin Electric is a member. UWIG provides current, real world information on utilities’ experiences integrating wind power into their electrical systems.
He also suggested members of the Montana Wind Working Group would benefit from being involved with the National Wind Coordinating Committee (NWCC) especially on transmission, siting, and avian/wildlife issues. There will be a meeting in Washington sponsored by NWCC to review the US Fish and Wildlife Services guidelines. Highlights and reports from the meeting will be posted on the NWCC’s website – www.nationalwind.org.
Larry alerted the group to a Federal Energy Regulatory Commission (FERC) meeting scheduled in Denver on December 1st. FERC is writing on operating rules that will be important in determining future opportunities for wind development. He thought members of the Montana Wind Working Group might want to participate.
Bonneville Power Administration (BPA) officials reported on activities they have pursued to follow-up on the discussions of their Wind Integration Package from the last Montana Wind Working Group meeting. The BPA Wind Integration Package was originally developed to address issues within the BPA control area. BPA has some customers in Montana. Over the past months, BPA has been looking at innovative means for having Montana wind projects located outside the BPA control area deliver to BPA customers “nested” in NorthWestern Energy’s control area in Montana. There are some legal issues associated with this effort. These arise because some BPA customers are served under what amounts to a “network services” transmission agreement which limits the flexibility BPA has to work on alternative mechanisms to deliver power to these customers. Employing this approach is probably not a way to get large wind projects built in Montana, but could help to facilitate smaller ones, possibly on the order of a total of 50 MWs or so.
BPA has focused on the potential for using “dynamic scheduling” to both serve its customers and simultaneously accommodate Montana wind projects. Conceptually, the approach BPA has been investigating would decrement the amount of power sent to customers by BPA when wind power is available to allow Montana wind project power to serve these loads. BPA also contemplates offering “regulating services” to Northwestern Energy to account for the periods when wind power might not be available within the Northwestern Energy control area. BPA has offered to meet with Northwestern Energy’s operations people to learn what issues relating to regulation, reserves, and other issues might arise from this approach. Paul Cartwright and Gail Kuntz have arranged a meeting between Northwestern Energy and BPA to explore these matters in early December. At this meeting BPA wants to get a sense of where Northwestern Energy is “coming from”, figure out how much additional regulation might be needed to satisfy Northwestern and whether BPA could sell that product to them. Northwestern Energy will have to be involved, at least, from the perspective of imbalance regulation.
Ron Rebenitsch asked whether or not Basin could play into this effort. Subsequent discussion suggested there, probably, isn’t much opportunity for Basin Electric in pursuing this approach.
These are, primarily, tariff issues
Ancillary services (telemeter the wind into the BPA system)
Imbalance penalties in the Northwestern tariff, but currently there is no charge to generators for regulation.
Employing this approach is probably not a way to get large wind projects built in Montana, but could help to facilitate smaller ones. This is a function of the size of the BPA loads in Montana.
Terrin Pearson described the BPA New Products Development Process. He indicated detailed information about the process is available on the BPA outside website, http://www.transmission.bpa.gov/Business/Customer_Forums_and_Feedback/Business_Practices_Technical_Forum/. Historically BPA’s business product development had been started primarily internally with customer involvement coming later in the process. BPA has recently opened the possibility for customers and other groups to propose/initiate proposals for new business products and practices at the beginning of the process. BPA would like for outside groups attempting to utilize this avenue to have their proposals as well flushed out as possible. BPA has set up an external group to review proposals for new products that they might receive. During the review process, the initiating entity can change their proposal in response to concerns that arise. New products proposals are posted on the website and comments are taken.
Relative to the “conditional firm” transmission proposal, BPA does not anticipate resolving the matter in the current rate case. However, BPA has committed to addressing it through a “mini-7(i)” rate proceeding.
Natalie McIntyre, Renewable Northwest Project (RNP), described the “conditional firm” transmission tariff recently proposed to BPA. This is more than just an RNP proposal. Natalie suggested there are substantial reasons for a new transmission product like the one that has been proposed. Currently, there is limited capacity available on the BPA system. BPA’s transmission capacity is virtually sold out on a “contractual basis”. While transmission capacity is contractual sold out, that capacity is not being used a regular basis.
At the same time, project developers need something more than “non-firm” transmission service in order to build their projects. “Seasonal firm service” is currently available. The “conditional firm” transmission product would afford project developers transmission capacity in the “conditional” months of the years, i.e., the months when “seasonal firm service” is not available. It would round out the transmission service available to project developers over the course of the year and give them a firmer transmission service than “non-firm” in the “conditional” months of the year. This would one of the sources of economic uncertainty confronting wind power developers.
The rates associated with a “conditional firm” transmission product have not been finally resolved. Conceptually, firm rates would be afforded in the months where “seasonal firm service” is granted and discounted rates would be applied in the other, “conditional”, months. There are also unresolved issues about how this new product would be different in the “conditional” months. Precautions need to be incorporated that would prevent short-term firm transmission service from being sold and undermining the “conditional firm” users. BPA will, probably, need to limit the availability of “conditional firm” transmission services in some way.
The two BPA products, wind integration services and “conditional firm” transmission service”, would work together to promote wind development. “Conditional firm” service would address getting transmission services to move wind power to markets and the integration package would address regulation and ancillary services issues associated with intermittence and schedule difficulties from wind power projects.
The Montana Wind Working Group discussed potential legislation that would foster wind energy development in Montana. The Montana Wind Working Group cannot lobby for specific legislation, but can foster communication and help to provide good information that can be used in the upcoming session of the Montana Legislature.
Chris Christaiens suggested a 2-page information sheet for distribution at the “Wind for Legislators” meeting would be very useful. It should identify the key issues frustrating wind development in Montana and provide a list of expert resources legislators have available to them.
The group suggested that these issues and potential legislatives actions to address them should be organized into four grouping so that legislators could easily understand what needed to be done and why. The four issue areas and the specific actions within each issue area that the Montana Wind Working Group identified follow:
- Maintain and clarification existing public policies that are working
- Universal System Benefits Program should be retained including renewable grants for grid-connected renewable energy projects
- Clarify that the 50kw ceiling in the Montana Net Metering law is an average capacity rather than nameplate capacity figure
- Reinstatement of the Mini-PURPA law in Montana and clarification of how “avoided cost” should be calculated and the role of the Public Service Commission role as contract arbitrator under its provisions
- Make leasing state lands for renewable energy development more efficient
- Increase the maximum loan amount under the Alternative Energy Loan Program to $40,000 and allow non-profit organizations to participate in the program
- Tax equity
- Senator Tester and Rep. Mendenhall are collaborating to resolve this issue – will be working with Wheatland County Commissioners (LC421)
-Transmission
- Transmission Construction Authority
-Markets (including developing new in-state use/loads)
- Fund to build renewable energy to attract new enterprise
- Adoption of a Renewable Portfolio Standard for Montana
- Potential for state purchases of wind power to serve its electrical load
- Clarify utility interconnection responsibilities
The group suggested that distinctions between larger and smaller projects as an overarching element in all proposals.
The Montana Wind Working Group suggested that it should offer itself as an asset to the new Governor. The group felt it should attempt to meet with the next Governor to make this offer as soon as practicable.
A draft “message statement” to be distributed to incoming Legislators will be distributed to the MT WWG along with a contacts list.
Cascade County volunteered to prepare the posters we need for the presentation Legislators and follow-up actions.
Paul Williamson reported on his Alternative Energy Learning Site. The wind turbine associated with the Alternative Energy Learning Site will be located between the Interstate and the river. Paul is looking into an electrolyzer to produce hydrogen and run cars converted to burn it. Also, the Learning Site will operate a bio-diesel fueled bus to move students and a photovoltaic array to schools.
The Montana Wind Working Group thought it would be helpful to get Mike Costanti to actually develop a model application for people interested in applying for Section 9006 Farm Bill grants. Paul Williamson thought that students could be used to hold potential applicant’s hands to get them through the process. A template would be helpful in simplifying the application process, but actually getting some written and funded would be the best assistance possible. The group expressed frustration that the current application process for this program is overwhelming to people.
Don Marble reported Liberty County is interested in more than just wind farms. They are also interested in community wind and small wind. The county is putting up wind anemometers to study the wind potential in the county. They have installed 1- 50m, 2-30meters and 2-20meter towers.
Bill Pascoe reported that the Horseshoe Bend project, located near Great Falls, has successfully negotiated a power cost and higher risk transmission services strategy with Northwestern Energy that relies on a transmission plan which was submitted to Idaho Power and approved.
Northwestern Energy is proceeding on a business-as-usual basis for small scale wind in 2005 under its USB program.
The next meeting of the Montana Wind Working Group will be scheduled between December 14, 2004 and Christmas. The draft minutes from the last meeting of the Montana Wind Working Group were approved as they had been modified in response to comments. The meeting was adjourned at 3:00pm.