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Wednesday, May 21, 2008

North Dakotans Getting Higher Bills For Wind Energy

We knew this was coming:

BISMARCK, N.D. (AP) _ North Dakota regulators have granted Otter Tail Power Co.’s request for a special charge to cover its investment in a wind farm.

Otter Tail owns part of a new wind farm south of Langdon in northeastern North Dakota. The project is capable of generating 159 megawatts of electricity. Otter Tail gets 40.5 megawatts of the wind farm’s output.

Otter Tail asked for a special renewable energy charge to cover its share of the wind farm. North Dakota’s Public Service Commission has voted to grant it.

The charge will be listed separately on the bills of Otter Tail customers, starting in June. Otter Tail has about 57,000 North Dakota electric customers. It serves the cities of Wahpeton, Devils Lake and Jamestown.

Commissioner Tony Clark says the charge will be less expensive for Otter Tail’s customers. He says the utility could charge more if it bought wind power on the open market. Clark says it’s better for customers if Otter Tail owns the power source.

This is in addition to the federal subsidy for wind energy which I believe is 1.5 cents per kilowatt hour.  That doesn’t sound like that huge of a subsidy when we’re paying something like 8 cents per kilowatt hour.  (I’m not even sure what it is.) But most of that price is transmission and delivery costs.  The power companies are probably only paying a couple cents for generating electricity.  (If anyone knows I’d like to hear what it is.) (Update:  I was looking at Minnkota Electric’s annual report and I think they were reporting that I was in the ballpark with 2 cents to generate a kilowatt hour.  It depends on what plant)

Even with this huge subsidy that we’re paying for, Otter Tail customers are STILL going to have to pay extra to generate their power from wind.  All of this for a computer model that hasn’t predicted the cold trend we’ve seen the last ten years.

We need to tell these politicians to keep out of what they don’t understand.

For the record I don’t hold this against Otter Tail and the Public Service Commission needed to allow this. But the government should quit threatening and actually carrying through their mandates and demands for something that is not competitive.  It doesn’t hurt the power company.  It hurts us.

Given that I do have to dig into Tony Clark.  He says that this is cheaper than buying wind energy on the open market.  So?  It would be an heck of lot cheaper to not have the wind energy in the first place.  Does the guy not understand that?

Comments

As you first implement these new technologies, they are always more expensive. Then, as the market grows and more competitors get involved, the price comes down. This was evident in the triple play industry where prices were over $1,000 per subscriber 6 years ago. Now they’re under $300.

If it were not for forward thinking, far sighted companies like Otter Tail, a lot of these innovations would never get off the ground. Otter Tail has always been at the forefront. Most of the independent power and telecom companies in the tri-state area are well managed and on the cutting edge. Thanks to them, you have one of the best maintained and up to date infrastructures in the country.

It takes years to implement these projects mostly working during the warmer months. Four or five years from now when the cost of any other kind of power has gone through the roof, you will be glad that you have cheap, abundant, clean power.

ews48 on May 21, 2008 at 02:37 pm

Right windmills are a new technology. Just like wooden shoes.

But if you think it’s worthwhile investing in then feel free to invest your own money.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on May 21, 2008 at 02:51 pm

Oh, c’mon! You can’t put a price on the romance of impractical energy sources.

Kevin on May 21, 2008 at 03:30 pm
Avatar for Bert Reed

This is only “a special charge to cover its investment in a wind farm”. It’s just like any other business that needs to charge its customers enough money to cover the costs of doing business and make a profit. The only difference is, since they’re a regulated utility they have to publicly ask for permission to charge enough money to cover their costs.

Bert Reed on May 21, 2008 at 03:38 pm

I agree that they should be abe to charge for wind power but only if its mandated.  Otherwise the shouldn’t pass on costs where they’ve wasted money.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on May 21, 2008 at 03:46 pm

North Dakota’s congressional delegation should fast track construction of nuclear plants in the state.
Just think of all the jobs.
Yeah, that’ll happen.

Kevin on May 21, 2008 at 03:56 pm

I think wind energy is a good thing to develop,even if the costs are slightly higher than other forms at this time. Consider: I bought a state of the art IBM PC in 1995 for a princely sum of $1600 (1995 $). Now a $400 (2008 $) laptop can run circles around it. How did this happen? Some people were not willing to wait 10 or 15 years- we went out and bought computers for what they would do for us then, thereby spurring development and competition that eventually lowered prices while raising performance. Lucky rest of you, huh?
Having said that, I think it is interesting that Otter Tail is asking for more money for that electricity, while their subsidiary in West Fargo, DMI, makes the towers the wind generators sit on. Hmmmmm......

Good Ol Boy on May 21, 2008 at 07:24 pm

I think wind energy is a good thing to develop,even if the costs are slightly higher than other forms at this time. Consider: I bought a state of the art IBM PC in 1995 for a princely sum of $1600 (1995 $). Now a $400 (2008 $) laptop can run circles around it. How did this happen? Some people were not willing to wait 10 or 15 years- we went out and bought computers for what they would do for us then, thereby spurring development and competition that eventually lowered prices while raising performance. Lucky rest of you, huh?
Having said that, I think it is interesting that Otter Tail is asking for more money for that electricity, while their subsidiary in West Fargo, DMI, makes the towers the wind generators sit on. Hmmmmm......

Good Ol Boy on May 21, 2008 at 07:24 pm

D’Oh!

Good Ol Boy on May 21, 2008 at 07:25 pm

I don’t know what this extra charge is but we’re talking a lot more.  The 1.5 cent subsidy is huge along with the surcharge we’re going to pay one way or another.

Regarding your PC thing.  First of all those PC’s at the time were the best you could get.  There wasn’t a better technology.  Wind energy would be like investing in a PC that didn’t work very well and cost a lot more.

Secondly the wind energy isn’t going to get a lot cheaper.  The technology’s pretty stable.  The problem isn’t technology, its the fact that the wind doesn’t blow all the time.  If you get on Minnkota’s web site you’ll see that most of the time they aren’t turning because there’s no wind.  It gets worse in the summer and the winter, the peak load times.

Regarding your conspiracy theory.  Who cares except we’re forcing the utilities to do this and have to allow them to charge enough to make a reasonable profit.  If they take a risk and it fails they should pay for it, but that doesn’t work out in this case.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on May 21, 2008 at 07:40 pm

Power is a government regulated monopoly; consumer technology isn’t, for the most part.

Kevin on May 21, 2008 at 08:30 pm

So, once the windmills are built the surcharge will be dropped? Right?


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on May 22, 2008 at 04:05 am

They’re on line. 

I was thinking about this a bit further.  I don’t know where we’d find any kind of huge savings.

Tower building is a mature field.

Aerodynamics (building the propeller) is a mature field.

Generators are a mature field.  (and any improvements would likely help other electricity sources as well.)

You can’t control the weather.

There will be some engineering improvements, but nothing that make that big of a difference.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on May 22, 2008 at 05:11 am

Anyone remember the Johnstown flood? If you live in PA you should, because you are paying a “surcharge” to rebuild the town of Johnstown. A temporary “surcharge” that was supposed to sunset 10 years after it was imposed. 1890 to 2008. That is a LONG 10 years. You NoDaks are going to get the same kind of screwing with this “temporary” surcharge. Yes indeedy.


Una Salus Victus Nullam Sperare Salutem

2Hotel9 on May 22, 2008 at 06:09 am

I don’t think this is temporary charge at all.  Wind energy is a more expensive way to generate electricity.  It appears 2 or 3 times more expensive.

I fail to see how it’s not going to stay that way despite the fact that some people wish it not to be.

We’re just going to get more and more of this stupid BS times go by.


What’s going to happen to US industry when the global warming extremists like John McCain double the price of electricity?  I would think all these factories will close and set up in countries where they aren’t scared of technology.


The Whistler's signature
The Whistler on May 22, 2008 at 07:11 am
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