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United States

First Wind moves on Utah expansion following PPA

US: The Los Angeles Department of Water and Power (LADWP) is sign a power purchase agreement (PPA) to buy 100MW of power from a Utah wind project.

Clippers 2.5MW turbine will be used on the Milford project
Clippers 2.5MW turbine will be used on the Milford project

The 185MW Milford Wind Farm in Beaver and Millard Counties, Utah is being given an additional 100MW by First Wind and is set to begin commercial operations in July 2011.

Last month there were concerns First Wind would be forced to abandon the expansion if it did bring in a PPA.

Commissioners at the LADWP, the largest municipal utility in the US, approved plans last month to buy energy from the expansion of the Milford Wind Farm in Beaver and Millard Counties, Utah.

It already receives power from the existing wind farm.

LADWP said its 20-year power purchase agreement would be prepaid at a reduced price of about nine cents per kilowatt-hour, with financing  provided by the Southern California Public Power Authority. The PPA still requires approval from the city council.

Last year LADWP made a big splash in terms of wind power. It will be responsible for bringing over 320 MW of wind projects online, through a mix of ownership and a unique model that provides financial backing to private developers struggling to secure financing in today's capital constrained markets.

The Milford project had ran into the same financing trouble many US wind developers have found themselves in: few prospects for finding a tax-motivated partner to take a majority stake in the project. In the past, these so-called tax equity partners bought into wind projects partly to use wind energy tax credits to reduce their tax bills.

When suddenly it looked doubtful that First Wind would find a tax equity partner upon completion and construction financing became difficult the LADWP provided a backstop guarantee, structured as a PPA with an option to own. This enabled First Wind to secure financing for the project.

Milford will use 58 Clipper 2.5 MW units and 39 GE 1.5 MW units and should be online by the end of the year.

 

 

 

 

 

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