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

More documents

Recommendations

Info

1 2 3 4 5 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 6 investment in the wind generation is assured a return. Therefore, MidAmerican 7 8 9 10 11 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. 12 13 14 15 16 17 18 19 20 21 22 23 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 10
1 2 3 4 would provide transparency. Likewise, MidAmerican has mentioned that they are considering the addition of new nuclear generation or gas-fired combined cycle generation. If MidAmerican commits to either of these options, then its avoided costs should then reflect the cost of this new generation, 5 6 7 8 9 10 11 12 13 14 15 Q. Should the avoided cost for QF generation include additional charges representing distribution and transmission system costs? A. Yes, the avoided costs should include additional amounts that, at the minimum, represent the average transmission and distribution system loss that MidAmerican experiences on its system because the addition of QF generation, especially in amounts of 100 kW or less, almost always reduces both transmission and distribution losses. There will be a few locations where MidAmerican has large amounts of wind generation where the transmission losses may not be reduced with the addition of a QF. However, simply using the average transmission and distribution losses on MidAmerican’s system would be a reasonable and fair assumption. 16 17 18 19 20 21 22 23 Q. ELPC and IEC have also stated that the avoided cost calculations should be fair and should result in rates that are sufficient to encourage cogeneration and small power production. How would you determine if the avoided costs are fair? A. The avoided costs would be fair if they truly represent the costs of MidAmerican’s additional generation or purchases to serve additional load. Since MidAmerican has been heavily investing in new wind generation, the avoided costs should be representative of what MidAmerican’s customers will be paying MidAmerican through their rates for that 11
Page 1 and 2: Joan Conrad Executive Secretary Iow
Page 3 and 4: 1 2 3 Q. What is your name and busi
Page 5 and 6: 1 2 3 4 5 6 7 8 9 10 11 12 Q. Is th
Page 7 and 8: 1 2 3 4 always discuss the factors
Page 9 and 10: 1 2 3 4 5 6 7 8 9 10 Q. What should
Page 11: 1 2 3 4 5 6 7 8 9 10 11 12 investme
Page 15 and 16: STATE OF IOWA BEFORE THE IOWA UTILI
Page 17: 4 Community Wind Turbine Projects A

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

Create successful ePaper yourself

Delete template?

Save as template?