Customers, not mandates, behind Willmar’s growing renewables portfolio

Willmar Municipal Utilities You are leaving WAPA.gov. (WMU) in central Minnesota is building a power supply that parallels the state’s renewable portfolio standard of 25 percent renewables by 2025, even though the standard only applies to power generators.

Willmar Municipal Utilities installed two wind turbines in 2009 to increase the amount of clean power in its electricity supply.

Willmar Municipal Utilities installed two wind turbines in 2009 to increase the amount of clean power in its electricity supply. (Picture by Willmar Municipal Utilities)

The small (9,600 meters), independent distribution utility is acquiring renewables because consumers are concerned about the environment, said WMU General Manager John Harren. “It is becoming the expectation of our customers,” he stated in an interview with a local newspaper. You are leaving WAPA.gov.

The renewable share of Willmar Municipal’s power supply is currently at 22 percent.  The town’s own wind turbines generate 2 percent, WAPA hydropower represents 13 percent and a mix of contracts with multiple generators makes up the balance. Because the Minnesota RPS only allows hydropower from facilities under 100 megawatts (MW), the WAPA allocation would not count toward the 25-percent goal if WMU was subject to the law.

Started with wind
Willmar Municipal took its first steps toward expanding its renewable supply beyond hydropower in 2009 by building two wind turbines, each with a 2-MW capacity. The estimated payback on the $10-million project is 10 to 15 years.

Initially, the turbine manufacturer DeWind Company of Texas was responsible for service and repairs. However, Willmar Municipal took over operation in August of 2014, training seven of its own employees to climb the turbines and perform maintenance. Local control resulted in more timely service and increased generation in 2015.

Power Supply Manager Chris Carlson said, “We’re making a good faith objective to build up our renewable portfolio.”

The rest of the utility’s power comes from the traditional sources of gas, coal and nuclear. “Even if we had a full fleet of renewables, there will always be a need for some sort of fuel supply for backup sources,” Carlson observed, “for times when there’s no wind or sunshine.”

Proceeding with caution
Pursuing clean energy for its consumers, rather than mandates, gives Willmar Municipal the time to carefully consider the advantages and drawbacks of each opportunity. Contracts with power suppliers have been instrumental in adding renewables, primarily wind and renewable energy certificates. As WMU procures additional purchased power agreements, emphasis will be placed on renewables.

Solar generation is growing more slowly in the Upper Great Plains than in sunnier parts of WAPA’s territory, due to the region’s low utility rates and less robust resource. So far, there is only one customer-owned solar array on Willmar Municipal’s system. However, WMU will consider including a solar garden on a new municipal facility it hopes to build, Carlson noted. “Adding solar will increase our costs, so we want to make sure we have a handle on our power supply before we move forward,” she explained.

Carlson expects the percentage of renewables to continue to grow, even as the city’s load remains stable. “If gas prices go through the roof 10 years from now due to the retirement of fossil fuel plants, we could still hedge our costs with renewables that have zero fuel costs,” she pointed out. “That’s one of the reasons why we aim for a diversified portfolio,” Carlson added.

Decades of planning lead to end of coal for Silicon Valley Power

A utility that prides itself on a diverse power supply will soon be removing one particular resource from its portfolio for good. Silicon Valley Power You are leaving Western's site. (SVP), the municipal electric utility serving Santa Clara, California, will become coal-free after Dec. 31, 2017, when it ends electricity imports from the San Juan Generating Station.

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The state-of-the-art Lodi Energy Center replaces coal-fired megawatts with cleaner-burning natural gas and fast ramping capabilities that complement renewable generation. (Photo copyright: www.siemens.com/presse)

The Federal Energy Regulatory Commission issued its final approval of the move on Dec. 30, 2015. Cleaner energy from renewable and natural gas resources will replace the power from the New Mexico coal-fired power plant for 53,000 Santa Clara customers. The confluence of many different policies and pressures led to this decision, observed Larry Owens, SVP manager of customer services. “But mostly, it is because our customers want us to reduce greenhouse gas (GHG) emissions,” he said.

Currently, about 36 percent of the utility’s power comes from state-mandated renewable resources, exceeding California’s 33-percent-by-2020 requirement You are leaving Western's site.. With large hydro included, more than 50 percent of the power the utility supplies is carbon-free, even as SVP maintains some of the lowest electricity rates in the state.

Changing times, concerns
The commitment to affordable, reliable electricity made coal power a sensible choice in 1980, when SVP partnered with Modesto Irrigation District You are leaving Western's site. and Redding Electric Utility You are leaving Western's site. to form the M-S-R Public Power Agency You are leaving Western's site.. The joint power authority purchased an interest in the San Juan Generating Station in 1983 to supplement seasonal hydroelectric generation and reduce the need to buy expensive and often cost-volatile short-term power.

Over the years, however, concerns grew about the effect of carbon emissions on the environment, and in 2006, California passed the Global Warming Solutions Act, Assembly Bill (AB) 32. In keeping with its history of environmental responsibility, Santa Clara launched its own strategy to fight climate change, starting with an inventory of all community emissions. Cataloging the city’s sources of emissions gave Santa Clara a good baseline to work with and aligned with the reporting requirements that preceded the carbon cap-and-trade market AB 32 established, starting in 2013, noted Owens.

One thing the inventory revealed was that although coal-fired power provided just 10 percent of SVP’s electricity, it accounted for 50 percent of the utility’s carbon emissions. Cleaning up those emissions and complying with other new environmental regulations covering all emissions promised to increase the costs and liabilities associated with the plant.

SVP, through M-S-R Public Power Agency, began confidential negotiations in 2011 to pull Santa Clara out of the San Juan contract, and started to examine alternatives to coal-powered resources. “Replacing 10 percent of our generation to get rid of 50 percent of our emissions just made good sense,” said Owens.

Many parts to lower emissions puzzle
Making the decision was the only easy part, though. SVP was still a part owner in the plant and was still paying on the bond that financed that purchase. The utility could have sold its interest to another power provider, but that would just be passing the climate-change buck, Owens explained. “When the opportunity came up to affect a true reduction in emissions by working toward the closure of two of the four units, we got behind it immediately,” he said.

Accomplishing that goal involved working with multitude of partners and interests, not only several utilities besides M-S-R, but also coal producers, the local economy, regional, state and federal agencies, environmental groups and other vested interests. “It was a lot of hard work,” Owens recalled. “All of the parties in that complicated effort deserve recognition for honoring everyone’s interest and still attaining the goal.”

Replacing 51 megawatts (MW) of electricity from the San Juan plant has proven to be as much an opportunity for SVP as a challenge. The utility became a major partner in the Lodi Energy Center (LEC), a state-of-the-art natural gas plant, and has received electricity from it since 2012. The combined-cycle LEC incorporates cutting-edge, “fast-start” technology to reach full load in 30 minutes. The ability to quickly ramp up reduces startup emissions and makes the system complementary to intermittent renewable resources.

Small hydropower plants present yet another opportunity for SVP to acquire new renewables. “We have two new facilities on deck ready to produce 32 MW,” Owens said. “Some of the hydropower we have picked up in the past few years was from expiring contracts with PG&E, but we are starting to see more projects that add capacity to existing facilities.”

These new wind turbines at Intel’s Headquarters in Santa Clara add to the 1 MW of onsite solar. Intel Corp is the leading user of renewable energy nation-wide. (Photo by Intel Corp.)

These new wind turbines at Intel’s headquarters in Santa Clara add to the 1 MW of onsite solar. Intel Corp., an SVP customer, is the leading user of renewable energy nation-wide. (Photo by Intel Corp.)

Keeping customers satisfied
Ending its exports of coal-generated electricity in 2018 will reduce the carbon footprint of SVP’s generation by 50 percent, two years ahead of the 2020 deadline in Santa Clara’s Climate Action Plan. That won’t be the end of the utility’s efforts to maintain a sustainable and affordable power supply.

Part of the motivation is staying ahead of state and federal environmental and renewable mandates, but most of it comes from the customer. “For one thing, our service territory includes some of the world’s high-tech giants,” Owens said. “Many of those large commercial customers have advanced their own sustainability initiatives and they expect their utility to keep up.”

For Silicon Valley Power, it all comes down to meeting and exceeding its customers’ expectations. “I can’t overstate how big a part our customers’ interests played in driving toward a coal-free portfolio,” Owens stated.