Wind Subscription Cost Eliminated

July 2006

Over the past five years, roughly 600 Nodak members have volunteered to pay a slight premium for some of their electricity for the purpose of promoting renewable energy. This month, the extra charge is being eliminated as it is no longer necessary to sustain the program.

In January 2002, Minnkota Power Cooperative, our wholesale power supplier, built the first of two large commercial grade wind generators. The wind turbine is located along Interstate 94 just east of Valley City, North Dakota. The project cost approximately $1.2 million, and the annual output of the 900 KW turbine is approximately 2,800,000 kilowatt-hours. A second turbine of equal size was put up just east of Petersburg, North Dakota later that same year.

The cost of wind energy has become progressively more competitive as technology improves and the size of wind generators increases. Also, the federal government provides a 1.8¢ subsidy for wind generation to help make renewable energy more competitive with other forms of electric generation. Even with these favorable attributes, a wind turbine is very expensive, and the cost of electricity generated in this manner was more than other energy available to Minnkota in 2002. Because of this, Minnkota created a wind subscription program to help pay for the generator.

Nodak and the other 10 distribution cooperatives who buy power from Minnkota advertised for members to participate. We asked members to volunteer to pay 3¢ per kilowatt-hour extra for blocks of 100 kilowatt-hours per month. Each block, therefore, cost $3.00 per month, and the added revenue was used to offset part of the cost of the wind turbine. This was a way of equalizing the cost of renewable energy with the other energy available to Minnkota either from their coal-fired generator, or from the regional energy market.

The first thing Minnkota discovered with their two new generators was that the output exceeded their expectations. With more kilowatt-hours available from the generators to pay for the investment, the subscription rate could be reduced. A more significant finding was that the energy from the wind generators became more valuable each year after they were built. The reason for this was because some of the energy that is made available from the wind turbines comes during periods when Minnkota is forced to buy expensive power from the power market. This may happen during power plant outages, during extreme peak conditions, or other unexpected events.

In recent years, the average cost of power from the market has been on a steady rise. This has caused the “average value” of wind-generated power to be greater. With the above factors considered, Minnkota has twice reduced the wind subscription price for renewable energy. Just recently, it was determined that the subscription charge could be eliminated. Those members who have been paying a little extra for renewable energy are no longer being charged the added subscription price.

First, and foremost, we want to thank those 600 members who stepped up to the plate and helped to make this project work. Because of their involvement, we now have two large wind generators, which we are optimistic will provide competitively-priced energy for many years into the future. Second, this experience gives us reason to believe it may be wise to build more wind generation in the near future. Minnkota is presently studying the feasibility of building several new wind turbines even larger than the ones located near Valley City and Petersburg. We will keep you informed on the development of this project in future issues of the Nodak Neighbor.