The non-regulated US arm of ScottishPower, PacifiCorp Power Marketing (PPM), has signed the biggest public utility wind power contract to date in the United States – a 20-year supply deal with Seattle City Light, the municipal utility for Seattle.
The deal is understood to be worth $100m over the life of the contract. Seattle City Light will start buying 50 MW of power commencing 1 January 2002, doubling to 100 MW in August 2002, then 150 MW from 1 January 2004 and, potentially, to 175 MW from August 2004.
Seattle City Light has a portfolio of its own power resources and, through the Stateline purchase, sought a fixed price renewable energy source as a long term hedge against western US price volatility.
In November 2000, Seattle City Light purchased through PPM a block of 100 MW from the Klamath Cogeneration Project located in Klamath Falls, Oregon.
PPM’s Stateline Wind Plant on the Washington-Oregon border will produce the power. The Stateline Wind Plant, the largest single wind project in the western US, is currently under construction. PacifiCorp Power Marketing will sell all the energy from Stateline for the next 25 years. The initial phase of Stateline will be completed by year end and comprise about 400 turbines with a capacity of 265 MW. FPL Energy is building and will own and operate the wind farm.
PPM’s CEO Terry Hudgens said: “This long-term contract is testament to the demand for renewable resources in the region, and validates PPM’s marketing strategy around well-placed, cost-effective wind resources.”
The city of Seattle announced in September its intention to become the largest purchaser of wind power by a public utility in the US.
Mayor Paul Schell submitted an ordinance to the City Council authorizing the transaction with PPM for energy from the Stateline Wind Generating Project. “With this wind purchase, Seattle will be on the forefront of renewable energy in the nation and the world,” Schell said. “From the Cedar River Watershed to the Kyoto Protocol, Seattle continues to show its leadership on environmental issues.”
Stateline power will be delivered to the West Coast power grid via Bonneville Power Administration (BPA) and PacifiCorp transmission lines. Through proposed agreements, BPA and other utilities will supply hydropower resources and associated services to “shape” variable wind energy, thereby creating energy products that can be used reliably by end-use customers.
The deal provides ScottishPower with a rare piece of good news from its US operation, PacifiCorp. In September ScottishPower issued a warning that profits from the American business would be lower than had been expected.
The regulated part of PacifiCorp was forced to buy expensive forward contracts for power at the height of the Californian power problems because of a large outage at its Utah generating plant.