 Close to 600 first- to fourth-grade students celebrated Earth Day at Blue Canyon, visiting over a three-day period. WFEC provided an electrical safety demo, an arts and crafts session at which the students built anemometers, a coloring contest, and lunch. Wind Cooperative of the Year Interview: Western Farmers Electric Cooperative Date: 5/1/2005Location: Anadarko , OKWind Powering America and the National Rural Electric Cooperative Association (NRECA) presented Western Farmers Electric Cooperative with the Wind Cooperative of the Year 2004 Award at NRECA's TechAdvantage 2005 Conference and Exhibition, San Diego, California, February 2005.
Q. Tell us a little about Western Farmers Electric Cooperative.
A. In existence for more than 62 years, Western Farmers Electric Cooperative (WFEC) is Oklahoma's largest locally owned power supply system. WFEC is a generation and transmission cooperative that provides essential electric service to 19 member-owner cooperatives, Altus Air Force Base, and other power users. We serve about three-fourths of the rural portions of Oklahoma, even though we don't serve retail customers.
Q. How did Western Farmers become involved with renewables and wind in particular?
A. I've been here for 27 ½ years, and hydropower has been part of our generation mix since before I got here. It's our cheapest source of electricity for our member owners.
We studied wind and found out that it was also a good choice for our member owners because of the economic advantages. We signed the first power purchase agreement in the state of Oklahoma with Zilkha Renewable Energy in January 2003. The co-ops led the way. We started taking test energy from the 74.25-megawatt Blue Canyon Wind Farm on November 2 of the same year. It was a massive, rapid undertaking driven by the pending expiration of the PTC 1. The site was declared commercial on December 23, 2003. In 2004, the first full year of the project, we generated approximately 265,000 megawatt-hours.
The PTC allows us to pass economic benefits on to our owners. The gas market is so volatile. Wind gives us another cheaper source of generation and diversifies our generation mix. Now we have water, wind, coal, natural gas, and backup diesel potential (we don't like to use diesel, but sometimes it's cheaper than gas).
Wind is good for the environment, it's good for member owners, and it's good for the community. Our decision was primarily based on economics. Wind has pumped funds into the local area.
Our prediction for 2004 was that wind would fill about 5% of our energy requirements. As it turned out, it only filled about 4% because our demand was greater than what we anticipated. And in 2004 about 15% of our energy requirements came from hydropower because it was a great water year. We're pretty darn green—14% to 20% of the energy we deliver to our customers is generated with either wind or water.
Q. What needs to happen to engage rural electric co-ops to support wind energy?
A. The bottom line is that rural electric co-ops are extremely supportive of the environment and renewable energy as long as it makes economic sense for their member owners. We have to deliver reliable service at the lowest possible cost to our member owners.
One operational difficulty is the variability of wind. You can't have a huge percentage of wind in your generation mix because it's difficult to predict and can't presently be stored economically. Last week we celebrated Earth Day at Blue Canyon, and I told a visiting group of students that if they want to get rich, they should figure out a way to economically store electricity for use when we need it.
Another operational difficulty is that transmission is extremely limited and since it is regulated, there is very little incentive for utility companies to build new transmission lines. Some of the best wind resources can be found in the panhandle area of Texas and Oklahoma, but there are limited transmission resources because few people live there. We need incentives for utilities to build transmission, and then wind farms would follow.
Q. What are your plans for the future regarding renewables and wind?
A. We currently have no plans to expand the amount of wind in our generation mix. That's not a negative statement about wind. Oklahoma has a great wind resource that presents many opportunities, but we've learned that the demand curve for electricity is exactly opposite the supply curve for wind. If you can back down expensive gas, wind energy is a good thing. It's not economically feasible if wind backs down cheaper energy like coal.
Q. Anything else you'd like to add?
A. Oklahoma does not have an RPS 2 . We thought, "Why wait for the legislature to mandate renewable energy if it makes economic sense?" Our company was 19% green last year, without the legislature telling us to do it. We're proud of that. Co-ops will lead the way—certainly in Oklahoma.
1 The Production Tax Credit (PTC) provides a 1.8-cent per kilowatt-hour credit (adjusted periodically for inflation) for electricity produced from a wind farm during the first 10 years of its operation. It's an important element of financing wind projects. The PTC expired on December 31, 2003, but a 2-year extension (through December 31, 2005) has been approved.
2 An RPS, or Renewable Portfolio Standard, is a requirement on electric utilities and other electric suppliers to supply a minimum percentage or amount of their load with eligible sources of renewable energy.
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Presentation of the Wind Cooperative of the Year 2004 Award to Western Farmers Electric Cooperative.
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