Bonnie Lund, with regional utility Xcel Energy, which serves roughly 28% of the state, says the company intends to honour the REO, saying that lawmakers spoke loud and clear about what they wanted. "Our state leaders have urged us to take advantage of the renewable resource that exists here," she says. The law comes into force on August 1.
While acknowledging the law lacks teeth, Kim Christianson with the North Dakota Department of Commerce also believes power retailers will meet the target and calls the decision a sea change for such a traditionally conservative state. "There has been resistance in the past towards renewables but that has changed dramatically," he says.
Also in the package is a provision that knocks down the rate at which wind farm assets over 100 kW are taxed as property to a low 1.5% for projects completed after June 30, 2007, and through January 1, 2011. After that date, the rate reverts to the standard 10% property tax.
Already, the laws have had an impact. "We were looking at a wind project almost regardless of legislation -- though we were watching it pretty closely," says Cris Kling with Otter Tail Power Company. Otter Tail is partnering Minnkota Power Cooperative and FPL Energy on a 159 MW wind plant in Langdon, Cavalier County, North Dakota. FPL Energy will build and operate the project and own 118.5 MW, with Otter Tail owning the balance of 40 MW. Minnkota, however, will buy most of the power, with Otter Tail buying 19.5 MW.
The two utilities, under Minnkota's lead, will upgrade 35 miles of existing 41.6 kV transmission line to 115 kV between Langdon and Hensel to deliver the wind-generated electricity into the high voltage transmission network. The project uses GE 1.5 MW turbines and both the project and transmission upgrade are expected to be done by early next year.
Kling says Otter Tail is well on its way to meeting North Dakota's REO. The company has an integrated resource plan calling for a total 160 MW of wind assets to come online over the coming years. At that rate, this would put the utility at between 12 and 15% in their service area, which includes North Dakota but also South Dakota and Minnesota.
Lars Møller from wind turbine tower manufacturer DMI Industries, based in West Fargo, North Dakota, believes the non-mandate model for the REO law will exist for some time. He predicts North Dakota will eventually follow other states with a stronger mandate with enforcement mechanisms. But if projects are getting built without a mandate, Møller questions the necessity for such a law.