Invenergy seeks wind farm money from We Energies (UPDATE)
Chicago-based Invenergy LLC wants to finance its 100-turbine wind farm project near Green Bay with We Energies’ money and has put the decision in public service commissioners’ hands.
“It would set a big precedent if they approve it,” said We Energies spokesman Brian Manthey. “How do you set the terms? How would you fulfill order points? How do you maintain the customers’ best interest? Do you sign whatever deal there is or negotiate?”
The Public Service Commission of Wisconsin is reviewing two major wind farm proposals — We Energies’ estimated $413 million Glacier Hills Wind Farm in Columbia County and Invenergy’s Ledge Wind Farm in Brown County, the price tag of which is undisclosed.
The problem for Invenergy is that while company executives are confident of getting project approval, they’re not confident they can afford it.
“The reality of the market today is that you need a long-term financing commitment to make these projects go,” said Joe Condo, Invenergy’s vice president and general counsel. “We’re not a utility, so we don’t have a rate base to build these projects alone.”
Because both projects are up for approval, Invenergy has petitioned the PSC in its review of Glacier Hills to make We Energies sign a purchased power agreement with Invenergy to buy power from Ledge.
That way, Condo said, Invenergy gets some money for its project and We Energies gets to make more strides toward its state-set goal of generating 10 percent of its electricity from renewable sources by 2015.
Utilities need purchased power agreements to reach that goal, Manthey said, but using another company’s project as leverage should not be the means to achieve that goal.
“The PSC’s review should be about Glacier Hills,” he said. “The environmental impact statement done for Glacier Hills said of the two, it had the better cost benefit.
“To tie its approval to a PPA is just dangerous because who’s to say another company doesn’t come in and say, ‘Our PPA is just as good or better’?”
We Energies is expected to deliver by Friday a written brief responding to Invenergy’s request. In a document filed last week with the PSC, We Energies executives asserted Invenergy’s PPA proposal is “tentative” and created a higher risk for the utility.
“The bottom line is the agreement has to make sense for our customers,” Manthey said. “Glacier Hills provides us with a project we know is going to provide renewable power from a good resource. I don’t think we want to speak to specific projects by other developers right now.”
Invenergy has submitted a confidential proposal to We Energies laying out possible terms and pricing of a purchased power agreement. To date, Invenergy has spent about $700 million on Wisconsin projects and come to purchased power agreements with many utilities on wind projects.
Condo said private developers would not have to try getting a piece of utility projects if the state better regulated utilities.
“The only way to get into the mix is to intervene,” he said. “There is no law in Wisconsin that says utilities have to bid their projects. They can just go and build it as they please. If it was bid, and we lost, OK, but we don’t even get that opportunity.
“If all utilities tell us they want to build their own projects, we’re done.”