COLUMBIA — The city has plans for a 20-year contract to purchase wind energy from Iowa that would account for about 6 percent of its total electricity.
Ryan Williams, assistant director of Columbia Water and Light, said city representatives hope to finalize the details of the contract Tuesday in a meeting with NextEra Energy Resources, a subsidiary of Florida Power & Light Company, which owns the wind farm.
The purchase would give Columbia the rights to the output from 14 wind turbines in Winnebago County, Iowa, at a fixed price for an estimated 78,291 megawatt hours per year. The city's total electric system in 2010 was 1,185,352 megawatt hours.
Williams estimated the city would pay $42 per megawatt hour, though that price is not finalized. There could be additional costs to transmit the energy between northern Iowa and Columbia, he said. Those costs would determine whether Columbia pays above or below market value for the wind energy.
The city's average non-renewable energy cost per megawatt hour was $47 in 2010, according to Columbia Water and Light's 2011 Renewable Energy Report.
Because electric prices vary by location and because there is some congestion in the transmission lines at the Iowa wind farm, there are periods of time during which Columbia would have to pay additional costs to operate the wind turbines. Williams said the city is exploring ways to avoid that. He also said transmission improvements scheduled in the next few years should remove those additional costs.
The cost of the wind energy is comparable to what the city would pay if it sought new coal resources, even considering those additional costs, Williams said. The fixed price over 20 years also makes it an enticing offer, he said.
Water and Light Advisory Board member Tom O'Connor said federal incentives have made wind energy more affordable.
"It's definitely exciting," O'Connor said of the contract. "Not just for us but for renewable energy, to see that the market has moved, that if you go for the cheapest option, you can go for wind."
The city solicited proposals for wind energy after noticing the favorable market conditions for the renewable resource. A 2004 voter-passed ordinance mandates that the city pursue renewable resources and expand its renewable energy portfolio by 5 percent every five years.
The city already gets wind energy from Bluegrass Ridge Wind Farm in northwest Missouri at $65.95 per megawatt hour. That wind energy accounts for 1.5 percent of the city's electricity.
Renewables account for slightly more than 5 percent of Columbia's total energy production this year, Williams said. He said he hopes the wind energy purchase could raise the city to near 10 percent before 2013, the next benchmark in the ordinance.
MU has expressed interest in up to half of the wind energy in the contract, but negotiations have yet to begin, Williams said.
The Water and Light memo states that the contract was scheduled for presentation at Monday's City Council meeting, but Williams said the purchase will not be complete by then.
"There are issues we still have yet to resolve," he said. "I think we were supposed to be further along with our discussions."