• Thanks to tax breaks, clean-burning air currents turn profitable

The best news out of 2001, a mostly blighted year for the energy industry, came from wind power Ñ finally competitive after all these years.

While some energy companies are backing away from plans to build new generation facilities, wind power developers rushed to get projects done by year's end so they would qualify for federal tax credits.

New wind farms now sprawl across farmland and rangeland in Gilliam and Sherman counties and along the Oregon-Washington border near Walla Walla, Wash.

'Wind prospectors are virtually blanketing Eastern Oregon, trying to get ranchers to reserve land for them to build turbines,' says Ed Mosey, spokesman for the Bonneville Power Administration. 'There's literally a wind rush going on right now.'

All three of the new wind developments met a Jan. 1 completion deadline, which qualified them for a federal wind production tax credit of 1.5 cents per kilowatt-hour for the first 10 years of operation. A megawatt equals 1,000 kilowatts.

The Stateline project, 399 windmills marching across the hilltops and ridges of the Blue Mountains in Oregon and Washington, is billed by developer FPL Energy LLC as the 'largest single wind-generating development in the world.' The windmills, built on privately owned land, each are rated at 660 kilowatts.

PacifiCorp Power Marketing Inc. is sole purchaser of the project's output, although it is reselling 90 megawatts of that power to BPA.

BPA, the federal agency that markets the electricity produced by the Northwest's federal dams, recently announced that it will buy the entire output Ñ almost 50 megawatts Ñ of the SeaWest WindPower Inc. development near Condon in Gilliam County.

BPA, which supplies 46 percent of the region's power load, also is purchasing 34 megawatts of wind power from the Foote Creek Rim project in Wyoming.

Secretary of Energy Spencer Abraham said in June that BPA was negotiating for up to 830 additional megawatts of wind power.

BPA hasn't yet contracted to buy any of the output of the third wind project completed this year. The 25-megawatt Klondike project in Sherman County was built by Northwest Windpower Inc.

Power 'in a huge hurry'

The tax credit helped make wind competitive, says Dave Kvamme, spokesman for PacifiCorp Power Marketing. He calls wind energy 'the good news' in energy development.

'I think most people consider building a gas turbine quick ÑÊbut it's still going to take two to three years if you have all the permits in place and the hardware is ordered and in the delivery stream,' he says.

The advantage of a development of wind generators, he says, 'is that they can be constructed in a huge hurry. With Stateline, there was nothing there a year ago; it's completely up and running today.'

Now, he adds, 'we've got a beautiful new green resource that's coming on line.'

BPA's Mosey says the agency expects to be buying and marketing an average of 450 megawatts of wind energy Ñ the only power that BPA now is contracting to buy Ñ by 2006.

When BPA put out a request for proposals last year, the projects submitted were projected to generate more than 2,600 megawatts. Most were proposed for sites in Eastern Oregon and Eastern Washington.

According to Mosey, a wind project rated at 150 megawatts will deliver an average of one-third of that amount over a year's time. 'While it's an important source of energy and a clean source of energy, it's not going to solve our energy problems,' he says. 'It's got to have a lot of support from the hydro system.'

Until recently, he says, BPA's only involvement with wind power was on a mostly experimental basis, involving projects that 'didn't work out very well.'

Now, he says, 'one of the things we're looking at is just how valuable wind is; we're trying to get some experience both operationally and economically.'

Rethinking gas-fired plants

Meanwhile, some of the natural gas-fired generation plants that are proposed in Oregon might be put aside until more felicitous times. But Sam Sadler, an analyst for the Oregon Department of Energy, says none of the developers has terminated the process of acquiring state siting permits.

Once the state grants the permit for a project, developers have two years to begin construction, although the state siting board can review the permit and grant a two-year extension.

The crash of Enron Corp. reverberated throughout the energy industry, complicating the task of obtaining financing for new plants. Calpine, Mirant and Avista Ñ all energy firms with plans to build generation facilities in the Northwest Ñ reportedly have slowed the pace on some projects.

In Oregon, Sadler says, 'Only one (developer) has notified us that things are sort of different.' That would be Coburg Power LLC, a company proposing a 605-megawatt, combined-cycle gas turbine plant in Lane County; Enron had been involved in the project.

'They say they're still trying to put something together, but Enron's departure was certainly a setback,' Sadler says.

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