Testimony of Tom Wind, Wind Energy Consulting, PC, Jamaica, Iowa

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savings are clearly a benefit from wind generation that is not reflected in MidAmerican’s
avoided cost calculations. It appears to me that regardless of how low their avoided costs
are, MidAmerican has proceeded to add hundreds of millions of dollars of wind
generation nearly every year. MidAmerican gets assurance from the IUB that it will be
able to include the wind generation in its ratebase. By inclusion in its ratebase, its
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investment in the wind generation is assured a return.
Therefore, MidAmerican
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discriminates against wind generation QFs in favor of its own wind generation
investments. This recurring problem with MidAmerican’s avoided cost rates emphasizes
the need that the avoided costs need to be more representative of the cost of new
generation that MidAmerican continues to install year after year, and not some temporary
low price that is likely not relevant to what its own customers pay.
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Q. ELPC and IEC have stated that the avoided cost calculations should be determined
in a way that is simple and transparent, so that a QF can have confidence in its
validity and accuracy. Do you have any suggestions on how this could be done?
A. Yes. For the purposes of my recommendation to develop a technology-specific avoided
cost rate for wind QFs, I believe there are at least two ways to provide a more realistic
and transparent method of avoided costs that would eliminate the discrimination that now
exists against wind generation QFs. The first method would be to use the proxy cost of a
new wind farm in MidAmerican’s service territory. The second method would be to use
the cost that MidAmerican’s customers pay for wind generation through their rates. This
cost calculation could specifically include the last two or three wind farms that
MidAmerican installed. Either of these two methods would be relatively simple and
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