The ruling last summer by the Colorado Public Utility Commission (PUC) that Xcel must include the project in its resource plan was a victory claimed by the wind industry as proof of the technology's competitiveness (Windpower Monthly, June 2001). But Enron Wind's Bob Gates says the project economics are dependent on the credit. "Without the value of the PTC, the project does not have enough revenue to raise the capital to build it," he says. "The PUC decision contemplated the presence of the PTC."
Since that decision, gas prices have dropped from about $5 per 1000 cubic feet to under $3. They had been as high as $10 in the winter of 1999-2000. When Xcel made its initial decision not to accept the Lamar project, it did so based on lower future gas prices. The PUC and renewable energy advocates won the day, however, by disagreeing with that projection.
Gates says suspension of talks is premature. "It's not good business or policy to have a public process aborted or violated," he says. "It's a sanctity of process issue. If a utility can change its mind and change the results [of PUC rulings], that's not good for Colorado." He says Enron's troubles have nothing to do with the Lamar project because the company had never intended to own it, nor would Enron Corp capital have been used because Enron cannot make use of the PTC. "Enron Wind and Zond before that are not good owners of projects," Gates says. "Our preference is to invest in turbines and project development."