Montana State Legislature
Study costs/savings of wind power
Background
The issue of this study is what costs and/or savings ratepayers may face if the state invests in further development of wind power. Wind's variability typically increases the day-to-day operating costs of a utility system. With rising coal and gas prices, however, wind is becoming a competitive player.
Concerns abound that large, utility-grade wind turbines can't be installed on the distribution grid without upgrades, resulting in higher costs being passed on to ratepayers. The cost of wind integration also can grow as the percentage of wind increases on the interconnected system.
Overall the economics of wind energy are largely a function of a project's size, the wind resource, policy incentives, and financing. Cost recovery is a threshold issue that varies among areas and utilities. This study will collect the various opinions across Montana about when and if the costs of integrating and transmitting wind may become a burden to ratepayers. It also could evaluate what options are available to offset any potential burden.
The study will examine transmission demands created by wind and the costs/savings of wind integration, including tax incentives for wind and land use.
Work Plan
The committee dedicated .15 FTE to this study. A summary of existing reports and studies on the costs and savings of wind power will be created. A panel discussion with representatives of Montana utilities, cooperatives, and other wind power players will be put together.
Deliverables will include a summary and potential legislation.
Staff Reports
Wind Power Costs/Benefits
Prepared by Sonja Nowakowski for January 24, 2008 meeting
Related Study Materials
The Northwest Wind Integration Action Plan
National Conference of State Legislatures: Midwestern Wind Policy Institute, June 15, 2007
