United States

United States

Tax credit spurs aggressive schedule -- FPL ramping up development

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FPL Energy, setting what the company calls an "aggressive construction and installation schedule" to get wind turbines in the ground before the federal production tax credit expires, says it will build three new projects totalling 135 MW by the end of the year. FPL is America's dominant wind plant developer and the new project announcements bring its planned wind generation construction this year to 569 MW.

The largest of the planned projects is a 63 MW facility in northeast Pennsylvania, with the power to be sold to Exelon Generation Company, which will be marketed through an arrangement with Pennsylvania's Community Energy Inc. FPL is buying the rights to the project from Orion Energy LLC, a deal expected to close before the summer. FPL will also build a 51 MW wind farm near Woodward in northwest Oklahoma, with production going to the Oklahoma Municipal Power Authority.

The third project is a 21 MW expansion to a 40 MW development it is installing near Minot, North Dakota. Otter Tail Power Company, a Midwest investor-owned utility with headquarters in Minnesota, signed a deal to buy the expansion's output last month. The deal will increase the utility's renewable energy portfolio, which also includes hydropower and biomass resources, to 9.5%.

In addition to constructing new facilities, FPL is expanding its portfolio even further with the acquisition of another 24 MW of wind assets in southwestern Pennsylvania. The company has reached agreement with Houston-based Zilkha Renewable Energy LLC and Virginia's Atlantic Renewable Energy Corp to buy the already operating 15 MW Mill Run and 9 MW Somerset GE-equipped facilities. Both transactions are expected to close by the summer. Output from the projects is and will continue to be sold to Exelon.

FPL's growth plans come at a time when the US utility industry has been hamstrung by financial problems and failing investor confidence. In September, FPL announced it would focus on expanding its wind power business as part of its plan to remain competitive (Windpower Monthly, November 2002). "In the face of difficult market conditions, we continue to execute our strategy to profitably grow our wind generation business," says company president Jim Robo. The company currently owns and operates 28 wind farms in ten states with a combined capacity of more than 1700 MW.

The new projects are in addition to 434 MW worth of projects in New Mexico, California, North Dakota and South Dakota that FPL expects to have operational before the end of the year. Its technology of choice is GE Wind Energy's 1.5 MW wind turbine. FPL will take delivery of more than 300 of the machines during 2003.

FPL's Steve Stengel says the company is optimistic the US Congress will extend the PTC this year, set to expire December 31, but for now it is "working as diligently as it can on 2003 projects."

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