Wind Energy from Oklahoma Finds Sweet Home in Alabama

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--About 202 megawatts (MW) of wind energy will make a 750-mile journey from a planned windfarm in northwestern Oklahoma to customers in Alabama, after Alabama utility regulators approved a 20-year power purchase agreement (PPA) between Alabama Power Company (Birmingham, Alabama) and TradeWind Energy LLC (Lexana, Kansas).

The PPA will allow TradeWind Energy to begin construction on the Chisholm View Wind Project in Enid, Oklahoma. As planned, the windfarm could generate up to 300 MW. If fully built out, the project would be the largest windfarm in Oklahoma and would have a total investment value of $680 million. Building 202 MW of wind generation at the site will reportedly cost about $400 million. TradeWind remains engaged in discussions with other potential customers for the remaining 98 MW of uncommitted generation at Chisholm View.

Last month, the Alabama Public Service Commission (Montgomery, Alabama) approved the 202-MW PPA between Alabama Power, a unit of the Southern Company (NYSE:SO) (Atlanta, Georgia), and TradeWind Energy. About 150 workers will be employed to construct the windfarm; construction is scheduled to begin in the middle of the first quarter of 2012. The Chisholm View Wind Project is slated to begin operating by the end of 2012.

The project's electricity will be transmitted over existing transmission lines, which will simplify planning and lower the project's cost. The windfarm reportedly will interconnect directly with a 345-kilovolt (kV) transmission line owned by OG&E (Oklahoma City, Oklahoma), a unit of OGE Energy Corporation (NYSE:OGE) (Oklahoma City, Oklahoma).

Alabama Power issued a request for proposals for renewable energy in 2009. The Enid project is the first contract signed in response to that RFP. Alabama does not have a state renewable portfolio standard (RPS), so the utility was not under a mandate to "green" its electricity supply.

"This agreement not only boosts our use of renewable energy, it also provides real savings for our customers," Matt Bowers, Alabama Power's vice president for environmental affairs, said in a statement. "It benefits both the environment and the people we serve."

The terms of the PPA were not announced, but an Alabama Power spokesman said the cost was less than the utility's avoided cost for the next unit of generation. The spokesman added that the PPA would not increase retail electric rates for the utility's 1.4 million customers.

TradeWind said the 202-MW PPA was the largest renewable energy purchase by a utility in the Southeastern U.S. During the last 12 months, TradeWind has entered into long-term PPAs that will lead to the construction of three windfarms that will deliver more than 600 MW of wind power to utility customers in 10 states served by Alabama Power, the Tennessee Valley Authority (NYSE:TVE) (Knoxville, Tennessee) and the Western Farmers Electrical Cooperative (Anadarko, Oklahoma).

"We have been working closely with Alabama Power to meet their needs for affordable renewable energy," said Frank Costanza, TradeWind's vice president for corporate development, in a statement. "Signing this agreement is a significant accomplishment for Alabama Power, TradeWind Energy and the wind industry, demonstrating that wind energy from the Great Plains can be delivered to Southeast utilities while reducing costs to their customers."

TradeWind, whose largest investor is Enel Green Power North America Incorporated (Andover, Massachusetts), a unit of Italian energy company Enel SpA (BIT:ENEL) (Rome, Italy), is developing 4,000 MW of renewable energy in 11 states throughout the central U.S. For more on one of its other large windfarm projects, see October 19, 2011, article - Wind Power is the New Cash Crop in Kansas.

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