Minnesota commission looks at Otter Tail wind purchase deal

Otter Tail Power’s (OTP) May 9 petition for approval of a Power Purchase Agreement (PPA) with Ashtabula Wind III LLC is on the Minnesota Public Utilities Commission’s Aug. 22 meeting agenda.

A note in the agenda, released Aug. 9, said that commission staff agrees with the state Department of Commerce recommendations in this matter.

Ashtabula Wind III LLC is a wholly-owned subsidiary of NextEra Energy Capital Holdings. The agreement is for the purchase of 62.4 MW of wind generation from the Ashtabula III Wind Project located in Barnes County, N.D. This PPA represents the third contract OTP has with a subsidiary of NextEra. The other PPAs are for the Edgeley and the Langdon projects.

In addition to approval of the PPA, OTP seeks approval to recover the energy costs incurred under the PPA through the Fuel Clause Adjustment Rider, along with confirmation that the wind energy purchased under the PPA will be counted toward OTP’s compliance with its state renewable energy standard needs.

The Department of Commerce recommends that the commission approve the PPA, if and only if, the PPA is in the best interest of OTP’s ratepayers. The Ashtabula III project is currently operational so there is no construction risk, it added. To be in the best OTP’s ratepayers, the Department said the PPA must meet the following three requirements:

  • The purchase price to be paid by OTP for wind energy is reasonable;
  • OTP’s ratepayers are appropriately protected from the financial and operational risks of the project; and
  • Curtailment provisions are appropriate.

Otter Tail said in a June 14 filing with the commission that it accepts the Department’s recommendations.

Said Otter Tail in the May 9 application: “This purchase is cost-effective and consistent with Otter Tail’s Resource Plan, the relevant portion of which has been approved for up to 100 MW of additional wind generation. The turbines were erected in December 2010 by NextEra and are currently producing energy.”

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.