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NV Energy's Greenlink Nevada Transmission Project Approved by PUCN

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Industry News

Wind Power Gets Affordable in Texas

LCG, May 15, 2003-Texas utilities in some areas are paying less for long-term wholesale wind-generated power than electricity from natural gas-fired sources, according to some estimates.

Improvements in wind turbine technology have apparently come so far as to rival the cost efficiency of natural gas, or so says the American Wind Energy Association. Granted, the competitive price is in part due to high natural gas prices, but proponents say that one of the only things holding wind power back is a lack of consumer awareness.

Traditionally, many utilities have steered clear of wind generation because of its high cost; technology and the rise in gas prices may change this trend.

Texas added 900 MW of wind capacity in 2001 alone, but the state added far more natural gas-fired capacity in recent years. Other states have also seen significant natural gas-fired plant construction over the last 3 years. In Texas this growth, coupled with a nuclear plant outage, has resulted in high natural gas prices. Some industry officials say that gas prices above $3.50 per million BTUs result in gas-fired power that is more expensive than wind power. Current gas prices are roughly $5 per million BTUs, and many people expect prices to remain high, as much as $4 per million BTU, through the next 10 years.

Meanwhile, several Texas suppliers are incorporating more wind in their energy sales.

TXU Corp., the largest electric company in Texas, recently signed a renewable energy contract with Dyess Air Force Base for 78 million kilowatt-hours. This agreement constitutes the largest renewable energy contract as yet made in the U.S., according to The Dallas Morning News. While the company can sell wind power, it is still regulated and therefore cannot offer power to North Texas utilities.

Reliant Resources also sells wind power plans, at a rate one cent per kilowatt-hour higher than that of TXU regular rates while keeping its nonrenewable product 1 cent cheaper than that of TXU. Reliant however, spends most of its marketing energy on non-renewable power; only 1 percent of its sales are for renewable.

Green Mountain Energy Company has started a plan to sign up customers to renewable power at 10 percent cheaper than customers currently pay, called "50 percent" cleaner." The rate is actually 1 cent per kilowatt-hour more expensive than non-renewable, but the fuel price is locked over the next 10 years, which Green Mountain speculates will result in 10 percent less cost for commercial customers over the long run. For 100 percent wind product, the average customer pays roughly $10 per month over TXU non-renewable rates.

By 2009, Texas utilities are required to buy 2,000 MW of renewable energy.

A tax credit of 1.7 cents per kilowatt-hour has also sustained the wind industry, and although the credit will expire this year, an extension has been provided for in currently pending legislation.

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