Xcel Energy, which is planning a wind power marketing initiative in North Dakota, wants to charge too much for the renewable electricity, wind energy development supporters say. State regulators are wondering whether any premium is justified.
Xcel’s Windsource program would offer North Dakota customers 100 kilowatt-hour blocks of wind energy for about $3, if they agreed to buy the power for at least one year, utility filings say.
North Dakota’s Public Service Commission, which is reviewing the program, held a hearing Wednesday to gather information about its pricing details. The commission regulates electric utilities, and it must approve the special wind energy rate before Xcel Energy can offer it to North Dakota customers.
Dean Hulse, a Fargo wind energy advocate, said North Dakota electric cooperatives that have similar “green power” marketing programs charge their customers much less.
Nodak Electric Cooperative, in Grand Forks, dropped its extra charge for wind energy last summer. Cass County Electric Cooperative charges 50 cents for 100 kilowatt-hours, while Capital Electric Cooperative, in Bismarck, charges $1.
“Xcel’s costs for that wind-generated electricity should be at least comparable to other green-pricing programs in the state,” Hulse said.
David Sederquist, an Xcel Energy senior consultant, said the less expensive wind power was coming from turbines that were cheaper to build at the time they were constructed.
The price of wind turbines, steel and the construction materials needed to put up wind towers has been rising with the increased demand for renewable energy, he said.
Xcel already offers the Windsource program in Minnesota, Colorado and New Mexico. It has more than 19,000 customers in Minnesota, and the number of participants grew 77 percent last year, the utility said.
Xcel has about 85,000 electric customers in North Dakota, most of whom live in Fargo, West Fargo, Minot and Grand Forks.
Sederquist said Xcel intended to sell energy generated at a wind farm near Velva to North Dakota customers who opted for the Windsource program. Depending on power demand, the company may push for development of more wind turbines, Sederquist said.
“The growth has just been phenomenal,” said Howard Kiyota, an Xcel Energy product portfolio manager.
Joe Richardson, a Fargo energy consultant, questioned whether wind customers should have to pay a premium. Most of Xcel Energy’s wind power goes to customers who have not expressed a preference for renewable energy and don’t pay extra for it, Richardson said.