The Minnesota Public Utilities Commission will be discussing at its Feb. 20 meeting a plan by Northern States Power, a unit of Xcel Energy (NYSE: XEL), to imminently issue a request for proposals (RFP) for up to 200 MW of new wind energy resources.
“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 utility told the commission in a Feb. 4 filing. “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.”
This wind RFP will not impact the resource need or timing of the competitive acquisition process currently pending before the commission in another docket. The resource need under consideration for that competitive acquisition process is in the range of up to 500 MW. With a wind accreditation factor of 13%, any capacity addition related to the 200 MW of wind resources the utility is seeking would not be significant enough to affect the identified need on its system. “As such, the competitive capacity resource acquisition process will continue once the Commission makes its determination in February on the size, type, and timing of the resource addition, and we will begin that resource acquisition process in March 2013 as designed,” the utility added.
The RFP will seek up to 200 MW of wind resources from existing or new projects. While the company said it is interested in ownership opportunities to balance its portfolio, it will accept proposals for all types of structures, including utility ownership arrangements and power purchase agreements of all types. Further, it will accept proposals of differing sizes at various locations, which will allow it the flexibility to add up to 200 MW through any combination of a long-term power purchase agreement (PPA) and/or company ownership.
The proposed schedule is:
- Issue Wind RFP, Feb. 15, 2013;
- Proposals Due, April 1, 2013;
- Evaluations Conducted, April-May 2013;
- Contract Negotiations, June 2013;
- Decision Report/Selections filed with the commission, July 2013.
Consistent with the regulatory processes in Minnesota and North Dakota, Northern States Power said it will make the appropriate filings with both the Minnesota commission and the North Dakota Public Service Commission seeking the necessary regulatory approvals for any projects selected.