Utilites: Winds of Change
Features
Written by Amanda Gaines   
Tuesday, 30 September 2008
Utilites: Winds of Change
As utilities consider adding renewables into the mix, they should also consider the connections, conversations, and costs that come before.


For the past nine years, Wisconsin Power and Light Company (WP&L), a wholly owned subsidiary of Alliant Energy Corporation, has watched the wind industry take hold in its region. It began working with local developers and gradually became involved with the construction of their wind sites. The utility was particularly interested in how to get wind energy onto its transmission system and how to connect it to the electrical system.

“We developed a lot of experience as we observed and participated in wind farm development,” said Kim Zuhlke, vice president of new energy resources for Alliant Energy. “Over time, we became more comfortable with the technology.”

As a utility, WP&L looks to adopt proven technologies. Once satisfied with what it saw, the utility decided it was time to add more renewables into its mix. And because of its location in the US, wind power was the most cost-effective way to go.

Partnering up
For others, the choice will not be so easy and the partnerships not as obvious, which is why, 15 years ago, a coalition of utilities and members of the solar thermal industry banded together to create USH20. The voluntary organization was developed to help utilities address their renewable energy needs and wants, helping them find partners for implementing solar water heating technology in a large-scale, mainstream way. USH20 has grown since its inception and now boasts roughly 180 utility and industry partners, but its goal remains the same.

“Any utility with an interest in solar water heating is invited to join,” said Chip Bircher, USH20 coordinator and renewable energy product manager at Wisconsin Public Service. “We want to help utilities implement cost-effective solar programs.”

USH20-affiliated utilities are placed on a distribution list that provides up-to-date industry information. The organization also provides access to experienced program managers for financial analysis, providing models to analyze a variety of possible scenarios. In Bircher’s opinion, the most valuable service USH20 provides to utilities is the monthly conference call that updates the group on topics ranging from what’s happening in various states to federal initiatives.

“As more utilities get involved and start to develop programs, the lessons they’ve learned will provide support for utilities getting involved moving forward,” Bircher said. “Many of the same barriers still exist today, however, including the perception that solar water heating isn’t reliable.”

That is one problem Zuhlke hasn’t found. “Our customers tell us it’s time to take advantage of the resources we have here rather than shipping our dollars overseas,” he said. “We hear, ‘Let’s generate here. Wind is prevalent. Let’s take advantage of it.’”

Kitchen table time
In both cases, education is key. For Zuhlke, it means spending a great deal of what he calls “kitchen table time,” talking with landowners and neighbors concerned about the wind farm developments and what they will mean to their land and their wildlife. It’s also a matter of calming fears about job security and job possibilities.

Rather than taking jobs away from those working at the utilities, wind farms in Wisconsin create job opportunities, a boon for parents who want to see their kids stay close to home but also have high-tech, skilled jobs. “Wind farms represent new tax revenues, new jobs, and an exciting sense of pride for rural upper Midwest communities,” said Zuhlke. “If you take the time to communicate these kinds of messages, you’ll end up with a satisfied community.”

For USH20, improved legislation, most of which addresses electric generation technologies such as biomass, wind, or solar electric, is the best measure of success. For example, Environmental Resources Trust (ERT), a Washington, DC-based nonprofit, modified its standard for renewable energy credits to include solar water heating. If a company wants to buy or sell renewable energy credits from solar thermal, they can receive accreditation from ERT.

In addition, USH20 submitted input to Federal Energy Management Program (FEMP) to include solar water heating under the program’s renewable energy requirements for federal agencies. The result: federal agencies can now use solar water heating to help meet their renewable and energy requirements.

“One of our major emphases is to make sure those rules get written so that solar water heating is eligible,” Bircher said. “Whenever you’re installing a solar water heater, if there’s an electric water heater as a back up, the solar water heater reduces electric consumption at the site just like a solar electric system. It’s important that people know they have that option.”

Federal and governmental initiatives aren’t always necessary to instill change, according to Tom Kimbus, director of the Solar America Cities program, a follow-on to the Million Solar Roofs initiative started in the late 1990s. He does, however, believe such initiatives help accelerate change.

“The federal government is uniquely positioned to reach out to states, cities, and/or utilities across the country and offer to serve as facilitator, information center, or convener,” Kimbus said. “By validating, through our national laboratories, the types of technical questions utilities might have about the impact of solar on their distribution grid and various other technical issues, we can provide some level of assurance, and utilities don’t have to start from square one.”

Spread the word
Although Alliant Energy provides less than 1% of the electric energy sold in the US, it’s planning to invest more than $1 billion in wind energy between now and 2010. The message Zuhlke said the utility is sending with such an investment is that wind energy is no longer recreational or just a way to support a green image. It represents a serious part of the utility’s generation portfolio and a new opportunity for WP&L and Alliant to generate energy locally.

“We’re concerned about the future, but we’re also trying to take care of our customers and our service territory,” Zuhlke said. “Wind power is similar to a hydro plant where you have large up front investment but basically no fuel costs. In this day and age, where there is uncertainty about whether we’ll be in a carbon-constrained world, wind farms provide a natural edge and stability into the fuel mix.”

From the solar water heating perspective, Bircher believes utilities have a moneymaking opportunity. For example, one electric utility in Florida owns the solar water heating systems it installs on customers’ homes, charging customers for the system’s solar electric by metering out how much solar hot water is used and then sending a bill.

The utility owns the system, takes care of it, and customers don’t have to worry about installation or maintenance. They just have to worry about paying their bill. “They’re actually saving money with that system, so it’s a win for the utility and for the customer,” Bircher said.

Sustainability of renewable initiatives, however, goes beyond the willingness of utilities to invest. Bircher said the sustainability of solar water heating initiatives grows stronger as interest and participation grows. For Zuhlke, WP&L and Alliant’s wind energy capabilities grow stronger as more customers decide to participate, so the utility developed its Second Nature Program with a rate that goes above the base utility rate and lets customers participate in the utility’s wind energy developments.

“Second Nature customers lead the way with the resource, and the utility is methodically adding wind into the base generation plan,” Zuhlke said. “The more competitive Second Nature becomes with other choices, the better participation we’ll have. How well you communicate your plan to your customers decides the success of your transition.” 
 
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