COLUMBIA — A proposed 20-year contract for electricity generated by an Iowa wind farm would increase Columbia’s renewable energy portfolio by an estimated 2.6 percentage points.
The proposed contract with Florida-based NextEra Energy Resources’ Crystal Lake Wind Energy Center, a wind farm in northern Iowa, would deliver 60 megawatt hours of wind energy every year — enough to power an estimated 6,000 homes.
For more information about Columbia's renewable energy usage, see the 2011 Renewable Energy Report.
After a proposed sale of half the wind-generated electricity to MU, the deal with NextEra would push the city's renewable energy portfolio from 5.4 percent to an estimated 8 percent.
The main benefit of the proposal is that wind energy costs from the company would come at a fixed cost for 20 years, said Connie Kacprowicz, utility services specialist with Columbia Water and Light.
“It’s locking in a great price," she said.
The cost of the electricity from the wind farm would start at $42.50 per megawatt hour and increase by $1 increments to a fixed cost of $45 in 2015 for the remainder of the contract.
Wind Capital Group's Bluegrass Ridge Wind Farm, near King City in northwest Missouri, is currently Columbia’s only supplier of wind energy. In 2010 its average cost to the city per megawatt hour was $65.95 — making NextEra’s proposal considerably less expensive.
Among reasons for the price difference is that Columbia and the Iowa wind farm are located within the same energy market and transmission system. The Bluegrass Ridge Wind Farm is not, so there are additional transmission costs.
Furthermore, the price for wind energy has come down since the 2007 contract with Bluegrass Ridge, said Jim Windsor, manager of rates and fiscal planning with Columbia Water and Light.
If the contract with NextEra is approved, city electric customers could potentially see an estimated rate impact of 0.75 percent, or 57 cents for the average residential customer's monthly bill of $76.26.
"Until we get past the summer months when electric consumption is at its highest, we can't say what our power supply costs are going to be for sure," Kacprowicz said.
The 2004 voter-passed renewable energy ordinance requires that Columbia increase its use of renewable energy to 10 percent by 2018 and 15 percent by 2023. In 2011, the city derived 5.4 percent of its electricity from renewable sources, surpassing the 2013 goal of 5 percent.
The ordinance also stipulates that the cost of renewable energy cannot raise electricity rates to customers by more than 3 percent over what the rate would be without renewable energy.
Columbia Water and Light sent out a request for proposals in February 2011 for a wind energy contract, and NextEra Energy Resources proved the most attractive offer. At its November meeting, the Water and Light Advisory Board unanimously decided to forward NextEra’s proposal to the Columbia City Council, and it's scheduled to come up for approval on Feb. 6.
The City Council will also consider a separate proposal to sell half of the electricity to MU, which hopes to reduce its greenhouse gas emissions by 20 percent by 2015.
With this wind purchase and the biomass boiler that will be fully operational by 2016, MU's greenhouse gas reductions will be closer to 30 percent, said Karlan Seville, Campus Facilities' communications manager.
Most cities in the country are considering wind energy over other forms of renewable energy sources for economic reasons, said PJ Wilson, director of Columbia-based renewable energy advocacy group Renew Missouri.
“In general, there is wind to be had,” he said.
Columbia consumed about 17,000 megawatt hours in wind energy in 2010. That represents 1.5 percent of the total electric system, which in 2010 was more than 1 million megawatt hours of combined energy. For comparison, a megawatt is 1 million watts, and 1 megawatt hour is a megawatt of power spent over one hour.
“The rule of thumb in the wind industry is that one megawatt can power 250 to 300 homes,” said Steve Stengel, NextEra Energy Resources spokesman.
NextEra operates 113 energy projects in the U.S. and Canada, 88 of which are wind facilities.