What about these windmills?

It seems somewhat ironic to be writing about windmills in August. The typical Midwest August includes scorching temperatures and very little wind. However, I have had several inquiries about Tipmont’s use of power supplied by the windmill fields in White and Benton County. In particular, I have been asked how much these windmills, and those planned for the surrounding areas in the near future, are going to help lower our members’ bills. Unfortunately, the short answer is…..they’re not, at least not in the immediate future. Let’s talk a little about power supply and these windmills.

All the power Tipmont members consume is provided by Wabash Valley Power Association (WVPA). WVPA is a generation and transmission cooperative. They provide power to the cooperatives in the northern half of Indiana. WVPA provides this power through a mixture of their own generation facilities and power purchased from the market. Approximately 5 % of the generation they do own or contract for is from sustainable sources like wind. When compared to other Indiana utilities, WVPA has more alternative energy in their overall mix. Its board of directors has worked, for several years, to expand the cooperative’s alternative energy resources when economically feasible.

At Tipmont our leadership and our Board actively support the installation and development of alternative energy sources such as wind, solar, and biomass. We are a member of Western Indiana Sustainable Energy Resources (WISER). We promote green projects through our strategic initiatives and the EnviroWatts program through which we have established a scholarship for Ivy Tech’s sustainable energy program (go to our web site and type EnviroWatts in the search field for more information on this item). We have offered zero interests loans to help our schools develop sustainable energy projects like the installation of the wind turbine at Mintonye school. As you can see, both Tipmont REMC and Wabash Valley Power have similar philosophies on the approach to alternative energy.

Now, let’s discuss these windmills a little bit. There is a huge misconception that all wind energy is “free.” This is far from the fact. Yes, wind as a fuel source is free. However, the windmill, the labor to build it, the land it sits on, the transmission grid necessary to carry that power to distribution systems, and the labor and materials to maintain those units, all cost a great deal. The costs associated with these components of the electrical system continue to rise.

WVPA does not purchase power from the wind fields in this area. The reason is simple and comes down to price and contract terms. WVPA looks for alternative energy sources that can be purchased for $.06 per kWh or less. They also do not tie themselves into long-term purchasing contracts. I have had discussions with the vice president at WVPA that handles their power-purchasing portfolio. He indicated that when they spoke to the groups that own the wind generation at those locations, not only did they want to sell the power for substantially more than $.06 per kWh; they also wanted the purchasers to lock into large power block purchases. This limits their ability to leverage secured contracts against market changes.

In short, had WVPA entered into a contract to purchase the power generated by those units, the cost per kWh, once blended with the current power portfolio, would increase. WVPA does purchase wind power from two wind farms – one in Illinois, and the other in Iowa. In both cases, the economics of the purchases were very favorable for the cooperatives. In the end, adding alternative fuel sources to our total power mix is very important for all of us. However, doing so at affordable prices is of equal importance. In short, our supplier has a goal of generating and/or purchasing power for our region at the lowest price possible. As a good corporate citizen, we want to promote economic development and buy locally whenever we can, and yet the vast majority of our members have made it very clear that they want us to provide their power supply at the lowest possible cost. Wabash Valley Power is working hard to do just that.

WVPA’s board of directors consists of representatives from each local cooperative. Director Bob Baker represents Tipmont on this board. I also attend these board meetings and can attest that Director Baker represents the membership very well. He certainly isn’t shy about addressing your concerns with the other board members or the WVPA management team. The Board as a whole has made it clear to WVPA leadership that they need to actively seek out ways to minimize rising cost and be creative in leveraging our generation resources against market fluctuations to secure our power supply at the lowest price available.

As always, if you have any comments or questions feel free to drop me an email and I will respond as quickly as possible.