Oklahoma Vaulting Ahead In The Race To Generate Power

"Where the wind comes sweepin' down the plain" is more than a fanciful show tune lyric.

By William Opalka

T hey do things fast in Oklahoma. The Sooner State, which got its nickname from the mad dash to stake land claims in the late 1880s, is moving full speed ahead to develop wind power in the early 21st Century.

Like those early settlers staking claims or tapping the vast winds across the plains to water livestock ranches in the state's agricultural past, current policy and interest have called for rapid development of utility scale wind in the state.

The state has embarked on an aggressive campaign to take advantage of its historic position to become an industry leader. Oklahoma's first utility scale wind farms, like Blue Canyon, pictured at left, are a little more than two years old. The trajectory of development has been nearly vertical since 2003.

Oklahoma will go from 0 to nearly 500 MW by the end of this year, and should top 600 MW in about a year following the latest project an-nouncement. Put another way, the state went from being virtually unrepresented in the U.S. list of places with utility scale wind to knocking on a top-five ranking.

'All of this has really happened in the last two years, and without a state RPS [renewable portfolio standard]," boasts Kylah McNabb, project coordinator for the Oklahoma Wind Power Initiative (OWPI), a collaborative research and outreach organization of the University of Oklahoma and Oklahoma State University.

An RPS is not likely to be adopted, either. But a combination of a good wind regime, a welcom- ing environment, forward-looking research and, of course, buyers and sellers of wind energy made this development possible.

Although the state has only three utility scale projects built, or in the process of being built, each is larger than 100 MW. Taken together, they will total 474 MW when construction is completed by the end of the year.

Oklahoma is ranked eighth in terms of wind energy potential in the U.S., even though it is relatively small in land area, especially in relation to its next-door neighbor to the south, Texas. And with all the names of states to choose for a musical comedy, which one was picked?

Oklahoma, where the wind comes sweepin' down the plain... And the wavin' wheat can sure smell sweet... When the wind comes right behind the rain.

While the current development might seem a recent manifestation, harnessing wind for electricity generation in Oklahoma has a modern component that was instrumental in helping to make wind a real alternative energy source. Nearly 30 years ago, the ample resource in Oklahoma inspired a famous name in the U.S. wind industry, Bergey Windpower Co. (see related article above), which made small wind systems viable and affordable for the previous generation of wind energy advocates.

Wind map beneficial

While Oklahoma's wind has been well known for centuries, the state had the foresight to position itself to take advantage of it. Since 1994, it has collected detailed meteorological data. A monitoring system in every county examines wind specs at 10 meters, making Oklahoma the only state with such a detailed map. Developers, therefore, have a head start when monitoring potential sites for more detailed analysis.

Steve Stadler, a professor and climatologist in the geography department of Oklahoma State University, says the research is ongoing and will become even more valuable.

'We're trying to research with the developers and incorporate performance data with the [predictive] models to see the results so far," he says. 'Most of what we have seen is that the models have been too conservative."

A state PTC

However, a state policy has had a limited effect on the development of the energy source. The state production tax credit (PTC) for projects of 50 MW or greater is in effect until 2012. The PTC is on a downward sliding scale and is slated to lapse entirely by 2012. While not a large subsidy, developers say the policy is indicative of the positive policy environment for wind energy in the state.

Oklahoma's PTC works like this: Projects commissioned prior to Jan. 1, 2004, receive a credit of .75 cents per kilowatt-hour; those commissioned between Jan. 2004 and Jan. 1, 2007, receive a PTC of .5 cents per kilowatt-hour; those after January of 2007 receive a credit of .25 cents per kilowatt-hour. All credits expire in 2012.

There is also a five-year property tax exemption available in some jurisdictions.

Long-standing interest

'Certainly, there was an interest in wind that dated to the 1980s from Central and South West Corp.," says Public Service Company of Oklahoma (PSO) spokesman Stan Whiteford. 'We periodically looked at wind to see if we could integrate it into our system from time-to-time." (Central and South West Corp. was the incumbent utility in much of Oklahoma until it announced a merger with AEP in 1997. That merger was completed in 2000, and PSO became the Oklahoma subsidiary of Columbus, Ohio-based AEP.)

That time has arrived this year. Wind is cost-competitive enough that PSO has decided to include wind energy as a source in its base rate. Last year, the company was 40% coal and 60% natural gas generation.

'We decided to share the benefits with all our customers by putting it into the general mix, and we are not charging premiums to customers who may want to enroll in a green power program," Whiteford adds.

Oklahoma has been supportive of the wind industry, according to FPL Energy spokesman Steve Stengel.

'We'd like to do more in Oklahoma - with the available land and transmission, there are other opportunities," he says.

FPL Energy developed and owns the first utility scale project in Oklahoma - the Woodward Energy Center, located in the northwestern corner of the state. The 102-MW facility opened in 2003; its output is equally divided - 51 MW each - between the Oklahoma Municipal Power Authority and PSO.

The Weatherford Energy Center is FPL Energy's second project in Oklahoma. It was originally conceived as a 106.5-MW project in early 2003, but in May of this year, when operations began, the project owner and customer announced there would be an immediate expansion of 40.5 MW, bringing the project's total capacity to 147 MW.

Oklahoma Gas & Electric, purchaser of the output from half of the Woodward Energy Center, has a premium pricing program that has attracted significant output. In the most recent figures, the utility accounted for more than 56 million kWh of energy purchases.

Report and recommendations

OWPI and others were recently directed to meet to develop recommendations for wind's future in Oklahoma. The group met for a year-and-a-half, with a preliminary report issued in April and the final document released at the end of September.

'We would like to move the PTC to a minimum of 1 MW, and to extend it for 10 years," McKnabb says.

Also, there was the recommendation for a transmission study to coordinate and integrate wind into the system of the Southwest Power Pool.

The state regulators - the Corporation Commission and energy office state program manager Clayton Robinson - say Oklahoma is also trying to encourage or expand wind development programs. The state model PTC is proposed, through the OWPI report, to be expanded to smaller producers of community wind projects of 1 MW or larger.

The report also recommends de-veloping wind programs in the technical schools, for training and certification of a needed workforce.

The state legislature is expected to consider the recommendations in its 2006 session.

Co-ops interested

Oklahoma's municipal and rural cooperatives have been important drivers in wind development, as evidenced by the lead role two of them took in early projects - the Oklahoma Municipal Power Authority is purchasing half of the output of Woodward, and the Western Farmer's Electric Cooperative is the customer of Blue Canyon I. The 74.25-MW Blue Canyon I was built by Zilkha Renewable Energy (now Horizon Energy), with its entire output sold to the Western Farmers Electric Cooperative. Both projects went online in 2003.

'Periodically, we researched the technology, and in the spring of 2002, we wanted to search for alternative generation for the cooperatives," says Brian Hobbs, general manager, legal and administration, for the Western Farmers Electric Cooperative, which runs 19 rural co-ops that cover most of the geography of the state's southern and western regions.

The co-op released a request for proposals for 20 MW to 80 MW of wind generation - 'intentionally vague," in Hobbs' words - to see what the market might bring.

The costs and benefits were weighed, and after the original nine to 10 bidders were narrowed down, Western Farmer's was able to select three finalists and settled on the site that became Blue Canyon I.

While the co-op has not worked wind into the base rate - it expects wind to provide about 4% of its energy needs - Hobbs says the ancillary costs of wind energy related to intermittency are 'two to three dollars per megawatt-hour, which is certainly manageable."

Construction is beginning at Blue Canyon II, an expansion of Blue Canyon I. Blue Canyon II, with its 151.2 MW making it the largest site in Oklahoma, will have its entire output purchased by PSO under a 10-year power purchase agreement.

Also, a 150-MW project for western Oklahoma was just announced, which would be co-developed by Catamount Energy Corp. of Vermont and Greenlight Energy Inc., a project developer from Charlottesville, Va.

The companies announced the Beaver Creek Wind Energy project at press time. Greenlight says it started developing the project, and another one in Wyoming included in the partnership, two years ago.