CU makes big investment in wind farm, renewable energy

A year from now, almost a third of the electricity City Utilities channels into Springfield-area homes and businesses will come from wind farms.

Faced with growing regulation on coal-fired power generation and increasing opportunities to buy renewable energy at a reasonable price, the utility is investing big in wind power.

CU officials announced Thursday that they have struck a deal to purchase power from a new, 200-megawatt wind farm Duke Energy Renewables is building north of Oklahoma City.

In addition to growing the share of CU's electrical portfolio that is unaffected by federal emissions limits, the move is expected to save customers money.

CU's 22-year contract will allow it to buy electricity at a price about 15 percent lower than what it costs to produce locally at the John Twitty Energy Center, according to Steve Stodden, CU's associate general manager for electric supply.

"This is the entire Phase I of this project," Stodden said. "We bought the farm, essentially."

CU currently has a contract to purchase 50 megawatts of power from the Smoky Hills Wind Project in Kansas.

That amount of electricity, Stodden said, accounts for about 7 percent of the power CU supplies to customers. The addition of the new Duke Energy wind farm, operated by Frontier Windpower LLC, will increase the wind share of CU's portfolio to an estimated 32 percent.

Adding in CU's other renewable energy sources, including the solar farm in Springfield and the methane gas plant at the Noble Hill Landfill, brings the total to about 36 percent "that would be considered emission-free," Stodden said.

"We have over the course of the last few years looked for an opportunity to expand our renewable energy portfolio," Stodden told members of the Board of Public Utilities on Thursday.

CU put out a bid in September seeking additional wind power as a hedge against future limits on carbon emissions, he said. The utility encouraged applicants to pitch bigger plans than in the past — the Duke farm was the result.

Duke had obtained tax credits for the planned Oklahoma farm but was in danger of losing them if a customer could not be found soon, Stodden said, noting the company was "very easy to work with."

"It was the best price we'd seen on wind," he said. "I think we hit at just the right time."

CU General Manager Scott Miller said the heavy reliance on renewable energy sources, which are somewhat dependent on weather, would not have been practical in the past.

"Thirty-six percent is scary for renewable," Miller said. But the utility can still rely on local power generation for capacity and can purchase additional electricity as needed through the Southwest Power Pool.

He said the Duke farm is located along several major transmission lines, which should help to avoid some of the bottle-necking issues CU has experienced with the Smoky Hills farm in Kansas.

The 200-megawatt farm in Oklahoma will produce enough electricity to power about 60,000 homes, according to the news release from Duke Energy Renewables. Construction is scheduled to begin in earnest early next year, with the farm expected to be operational by the end of 2016.

CU board members greeted the news with enthusiasm.

Attorney Brian Hamburg, who was attending his final meeting as a board member, noted that CU 's costs will be based on the power provided.

"When the wind isn't blowing, we don't pay," he said. "I think this is a really, really smart move."

Board chairman Skip Jansen also complimented Stodden on putting together the deal. "Timing is everything and you hit this one right on the mark."

The Sierra Club, which has been critical of CU's continued use of coal, also praised the announcement.

“Today’s announcement marks an important turning point for the city of Springfield, which will now be on the path to getting a third of its power from wind energy,"  Andy Knott, senior campaign representative with the Sierra Club’s Beyond Coal Campaign in Missouri, said in a statement.

“We applaud City Utilities for recognizing the shifting energy economy and tapping into low-cost renewable energy to modernize the utility for decades to come," Knott said. "With major clean energy investments now on the books, we will continue to urge City Utilities to shift away from its aging fleet of coal-fired power plants, which burden customers with high costs and threaten local air and water."

The two power generation units at the John Twitty Energy Center in southwest Springfield are the only CU facilities still using coal for fuel. The utility announced in October that James River Power Station, near Lake Springfield, would burn only natural gas in the future, as new environmental regulations made it too costly to continue burning coal at the plant.