North Dakota PSC reviews change in plans for 200-MW Courtenay Wind project

The North Dakota Public Service Commission has scheduled a July 23 hearing on three different applications from the Northern States Power unit of Xcel Energy (NYSE: XEL) related to a shift in plans where Xcel wants to buy outright, instead of just buy power from, the 200-MW Courtenay Wind Farm.

The commission has consolidated into one proceeding these three applications:

  • On April 30, Xcel applied for a Certificate of Public Convenience and Necessity for the project, to be located in Stutsman County, North Dakota.
  • On May 6, Xcel filed for an Advanced Determination of Prudence (ADP) for the project.
  • On May 11, it filed an application to discontinue the ADP previously granted by the commission in a power purchase agreement case.

The 200-MW Courtenay Wind Farm Project was identified for a power purchase agreement (PPA) through Xcel’s February 2013 Request for Proposals for additional wind resources. The Company previously requested an ADP for the PPA in July 2013, and received the ADP in February 2014.

Said the May 6 ADP application: “Due to changed circumstances described in the enclosed Application, the Company seeks to purchase the Courtenay Project and develop, construct, own, and operate it directly. Consistent with the Commission’s requirements and the Company’s commitments, the Company respectfully requests an ADP for the Company’s ownership of the Project.

“Unfortunately, Geronimo Energy, LLC (Geronimo), the developer of the Courtenay Project, has not been able to secure financing or a third party equity investor for the Project, and all parties have determined in good faith the PPA cannot be performed in accordance with its terms. If the Company does not step in to complete the Courtenay Project, we are concerned that the Project will not be built at all.

“Having conducted additional due diligence, and updating our assumptions, in association with the Company’s proposed ownership of the Courtenay Project, our analyses indicate that development of this resource addition remains viable under a different arrangement whereby the Company acquires, develops, and owns the Project on behalf of our customers.

“Taking steps to remedy the issues threatening the Courtenay Project is consistent with the Company’s commitment to seek opportunities to invest in generation within North Dakota. Rather than risk project failure, taking an ownership role will provide benefits to our customers and to North Dakota. Not only are the landowners and nearby communities hosting this Courtenay Project counting on the lease payments, community support, and tax base provided by this Courtenay Project, but the Company is also using North Dakota-based contractors and labor to construct this facility. And the ultimate success of this Project will further enhance the Company’s geographic diversity in its supply portfolio.

“The proposed transaction will be in the form of the acquisition of a limited liability company (Courtenay Wind Farm LLC), a subsidiary of Courtenay Wind Holdings LLC that holds all the assets of the facility. These companies are, in turn, affiliates of Geronimo. The Company then plans to merge the LLC into the Company and take over development of the Project assets directly. In addition, we recently entered into the turbine supply agreement (TSA) and balance of plant construction (BOP) contract directly with the suppliers. We intend to complete the Project, and own and operate the facility by December 31, 2016 to take advantage of the available federal Production Tax Credit (PTC).”

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.