Gulf Power signs with Morgan Stanley for more Oklahoma wind output

Gulf Power on June 27 petitioned the Florida Public Service Commission for approval of a negotiated Energy Purchase Agreement with Morgan Stanley Capital Group lnc., and the recovery of costs to be incurred under the agreement through the Fuel and Purchased Power Cost Recovery Clause.

On June 10, Gulf Power and Morgan Stanley executed the energy purchase agreement, which has a term of approximately 20 years subject to early termination provisions, including a termination provision for failure to obtain commission approval. Specifically, Article 2 of the agreement provides a termination right in the event that the agreement is not approved in its entirety by the commission through a final non-appealable order within 240 days of filing.

This agreement is substantially similar to the Energy Purchase Agreement between Gulf Power and Morgan Stanley which was approved by the commission in May 2015. That so-called “Kingfisher I” agreement involved a 178-MW portion of a wind  facility known as the Kingfisher Wind Farm, which at the time was under construction in Kingfisher and Canadian counties, Oklahoma. The wind turbines designated for Gulf Power under Kingfisher I entered commercial operation as planned in December 2015 and Morgan Stanley began delivering energy to Gulf Power on Jan. 1, 2016. Since that time, Morgan Stanley has been performing reliably and in accordance with the terms of the Kingfisher I agreement, said the utility, which is a subsidiary of Southern Co. (NYSE: SO).

This new agreement encompasses 47 additional wind turbines – the bulk of the remaining wind turbines at the Kingfisher facility. All 47 turbines have now entered commercial operation. The Kingfisher Wind Farm consists of a total of 149 2-MW wind turbines having an aggregate nameplate capacity of 298 MW. With the addition of this agreement in combination with Kingfisher I, 136 of the 149 Kingfisher turbines have now been designated for Gulf Power.

The remaining thirteen wind turbines  have been held in reserve by Morgan Stanley as a source of renewable energy credits (RECs) in the event that the units designated for Gulf Power do not produce sufficient RECs to meet Morgan Stanley’s contractual REC delivery requirements. Thus, when combined, the two energy purchase agreements essentially designate the entire facility’s environmental attribute production for Gulf Power.

Similar to the Kingfisher I agreement, this new agreement obligates Morgan Stanley to deliver to Gulf Power a fixed number of megawatt hours (MWh) in each hour of each month of each year throughout the term of the agreement. In this way, the agreement insulates Gulf Power from the usual variations of wind-powered energy production. On an annual basis, Morgan Stanley’s energy delivery commitment totals 356,843 MWh. This amount equates to approximately 3% of Gulf’s total annual jurisdictional energy sales forecasted for 2017.

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.