The new capacity is being required within specific time frames: 400 MW is required by 2003; another 450 MW by 2005; 550 MW more by 2007, and a final 600 MW by 2009. Texas already has some of the largest wind projects in the US. Last year, in the rush to install projects before the expiration of the federal Production Tax Credit, almost 140 MW of new wind was installed at McCamey, Big Spring, and in Culberson County in west Texas.
To facilitate the RPS, a "Renewable Credits Trading Program" is to be launched on January 1, 2002, and will be in effect until 2019. Retailers who do not acquire sufficient renewables credits will be penalised - with a penalty of $50 per MWh they have failed to generate or buy, or 200% of the average cost of credits traded during the year.
The rules, announced January 1, have already prompted new wind and other renewables activity. TXU Electric & Gas - formerly know as Texas Utilities and a subsidiary of TXU - is seeking bids for what it says is one of the largest renewable energy proposals in US history. TXU Electric & Gas and TXU are requesting bids for supply of approximately 500 million kWh of renewable energy credits. That is the equivalent of some 150 MW of installed wind capacity.
TXU currently buys all of the electricity generated from the 43 MW Big Spring wind project, which generates some 137 million kWh yearly. "The Big Spring WindPower Project is huge and this solicitation is almost four-times larger," says Steve Philley, vice president of TXU Energy Supply.
Big Spring was developed for TXU by York Research Corp, which is now planning to build "significant" new wind farms in the Lonestar state, as well as in a number of other regions. York is targeting Texas, it says, because of the RPS. York revealed the plans on January 18 when it reported its earnings for the nine months ended November 30. Its revenues were $814 million, compared with $589 million for the same nine months of the previous year. York said that most of the increase in income came from green power projects, including Big Spring.
Meanwhile, Austin Energy, the electric utility in the state capital Austin, has launched an ambitious green pricing program. GreenChoice, which will be available to the utility's 350,000 customers, is to provide power from wind, sun and biomass. By 2005, the city hopes that 5% of its electricity will be from renewables. Austin officials last year estimated that around 2000 homes and 275 commercial customers will subscribe to GreenChoice. The city, known for its progressive politics, already contracts for 10 MW of wind power from the 35 MW Culberson County plant.
Furthermore, by the end of this year, customers in 85 communities in Texas and New Mexico are expected to be able to choose wind power. Texas-New Mexico Power, which provides power to the communities, along with Cielo Power Market, LP and its affiliate Big Wind LP, will bring in renewable electricity from a project that Big Wind is developing near Fort Stockton in west Texas.
Last year Cielo won a contract to supply renewables to Southwestern Public Service Company of New Mexico from a project, the Llano Estacado Wind Ranch, near Clovis in eastern New Mexico.