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Water utility wants into wind
1 April 2007
The Washington Suburban Sanitary Commission (WSSC) in Maryland, one of the ten largest water utilities in the US, says it is now the first in the country to hedge its significant energy costs by contracting for wind power. It will pay a fixed $64 MWh for the next ten years for 85% of the power from a new 29.4 MW wind plant of Suzlon turbines being built in Forward, Pennsylvania, by Edison Mission Group. The remaining 15% goes to Constellation Energy, a large owner/operator of conventional generation in the US and a partner in the deal, which exploits the unregulated trading market offered by the PJM Interconnection grid. Consumers like WSSC seeking to clean up their energy use, by choice or requirement, more typically opt to buy renewable energy credits (RECs) from one source while buying electricity at regular rates from wholesale providers. But with average loads hovering at 20-28 MW, WSSC shops around in the day-ahead and block markets for the best deal for its power requirements. Beginning in January next year, WSSC will buy wind for base load blocks of power to satisfy one-third of its needs for running seven water and wastewater treatment plants, more than 5300 miles of fresh water pipeline and more than 5200 miles of sewer pipeline. With renewable energy mandates increasing in the region, WSSC is required to buy growing volumes of RECs. "We were looking at the REC premiums we would have to be paying. We projected they were getting pretty substantial, so we were looking at ways to avoid the premium but still buy renewable energy," says Taylor. "So we sat down with our energy broker...and the next year we came up with a plan to buy wind on a wholesale basis." In addition to avoiding price premiums in the REC markets, Taylor says long term price stability puts wind on a par with fossil fuels. "We think the price for wind is about the same as conventional power right now in this area," he says.
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