Northern States Power seeks offers for up to 200 MW of wind

The Northern States Power unit of Xcel Energy (NYSE: XEL) began taking offers on Feb. 15, with a submission deadline of April 1, for up to 200 MW of wind capacity for its Upper Midwest generation system.

Proposals will be accepted for either power purchase agreements or ownership arrangements. “To capture the recent one year extension of the federal production tax credit the Company is asking that proposals be submitted by close of business April 1st, 2013,” said the RFP. “If the Company elects to proceed with the RFP process following its receipt of the bids, we will consider expediting the process of review to the extent possible.”

While the company is interested in ownership opportunities to balance its portfolio, it said it will consider all proposals without preference toward any particular type of structure. Potential structures include:

  • Utility ownership arrangements;
  • Purchased Power Agreements (PPA) including C-BED; and
  • Any combination of the above.

Northern States Power will consider projects with a point of interconnection (POI) within the Midwest ISO footprint. However, projects with a POI outside of MISO Local Resource Zone (LRZ) No. 1 will be required to bear the cost of any Zonal Deliverability Charges to LRZ No. 1. The company reserves the right to reject any project that has not entered the definitive planning phase of the MISO generator interconnection process.

Bidders must provide a breakdown of interconnection and transmission costs associated with their proposal, including detailed cost assumptions for direct interconnection costs, network upgrades, system protection facilities, and contingent transmission costs.

The bidder will be responsible for paying all MISO costs associated with an interconnection request and subsequent studies. Bidder will also be responsible for the cost of all direct interconnection costs and the cost of network upgrades. The bidder needs to identify and quantify, to the extent possible, any unknown or contingent network upgrade costs that would be associated with interconnecting their proposed project. Bidder will also arrange and be solely responsible for all costs associated with delivery of energy to the point of interconnection with the Midwest ISO member system. Bidder will also be responsible for all losses incurred in transmitting energy from the proposed generating facility to the point of interconnection.

The RFP schedule from here is:

  • Proposal Due Date, April 1, 5 PM Central Daylight Time
  • Evaluation, Clarifications, Due Diligence, April – May 2013
  • Begin Contract Negotiations with Selected Bidders, June 2013
  • Application for Regulatory Approval, July 2013
  • Significant Construction Activities, October-December 2013

The utility told the Minnesota Public Utilities Commission in a Feb. 4 filing about the reasons for this RFP: “With the extension of the federal renewable electricity production tax credit (PTC) effective January 2, 2013, we believe it is prudent to assess opportunities for additional wind resources on our system at this time to determine if there are cost-effective wind projects that could provide long-term value to our customers. The January 2013 federal legislation replaced the PTC requirement that a wind project be placed in service by the end of 2012 with a requirement that a wind project begin construction activities by the end of 2013. With this extension in place, it is our intent to issue the wind RFP as soon as February 15, 2013 to ensure there is time for any new project that may be selected to begin construction in 2013.”

The utility’s last wind RFP was issued in September 2010. If it receives proposals this time around that warrant proceeding with a project, it said it will bring these selections forward for commission approval once the review process has been completed.

“During our current Resource Plan proceeding, we indicated that because we currently have enough renewable energy credits to meet [renewable energy standard] RES compliance requirements through 2020, there was sufficient time to revisit adding wind to our system once the PTC issue was settled,” NSP noted. “The PTC has now been extended, but only for a short time. Requesting proposals for additional wind generation now will allow us the opportunity to consider cost-effective wind projects; at the same time, we continue to have the option to defer acquisition of wind and remain on track with renewable energy compliance. Thus, by issuing the RFP, we are not committing to add wind generation if our analysis shows no projects would provide reasonable benefits for our customers over the long term.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.