Under the agreement, PacifiCorp, which does business in Utah under its division name Rocky Mountain Power, will have the option to purchase the Blue Mountain wind farm at the end of the contract.
The November 8 agreement provides for the sale of energy to PacifiCorp to be generated from up to 79.5 MW of capacity at the proposed wind facility to be constructed so that service can begin by December 31, 2012.
Blue Mountain is in the process of completing interconnection requirements, according to PacifiCorp’s application.
The seller expects the facility will deliver to PacifiCorp 206,833 MWh per year of net output and associated green tags, the agreement said. During the term of the contract, Blue Mountain will not sell any net output, green tags or capacity rights from the facility to any party other than PacifiCorp. The contract price includes green tags and capacity rights.
The contract price will range from $56.18 per MWh on-peak in April to $85.93 per MWh in August and from $45.72 per MWh off-peak in May to $55.49 per MWh in August, according to the contract.
Power will be delivered to PacifiCorp’s system at 138 kV at the Rio Algom/Carbide substation.
Under the agreement, Blue Mountain represents itself to be a qualifying facility under the Public Utility Regulatory Policies Act and agrees to provide PacifiCorp, upon request, with evidence to show its qualifying facility status.
The agreement is signed by Ryan Davies, Blue Mountain managing member, and Bruce Griswold, PacifiCorp director of short-term origination.
Davies is president and CEO of Renewable Energy Development Corp. (REDCO) and was appointed by Utah Gov. Gary Herbert to the board of the Utah Generated Renewable Energy Electricity Network, which was created by the Utah Legislature in 2009 as a bonding authority to support development of renewable energy transmission projects, according to the Utah Governor’s Office of Economic Development. Based in West Jordan, Davies’ company is involved in development and operation of wind and solar projects.
REDCO has secured 6,927 acres of private land in the corridor of some of the best wind and solar prospects in the state of Utah, according to the company’s website.
REDCO said it has more than two years of tower data for the site, has begun an interconnection process, and has received all permits to construct up to 400 MW of wind or solar, or both, on the site.
The Blue Mountain project is one of a number of REDCO projects that has potential for mixed-use energy development, namely wind and solar. REDCO said it expects to build up to 150 MW of wind at this site. However, the power purchase agreement said PacifiCorp has no obligation to buy more output or green tags if the project is expanded or an additional project is built in the vicinity. But PacifiCorp will have the right of first offer at the same terms and conditions as would be provided a third party.
The wind farm is expected to be equipped with 53 wind turbines, each 1.5 MW, manufactured by Goldwind. If the facility does not achieve commercial operation by the guaranteed date, PacifiCorp may terminate the agreement. If the facility achieves final completion based on less than the expected nameplate capacity rating, the seller has agreed to pay PacifiCorp damages for the deficit.
The agreement also gives PacifiCorp “step-in rights” to take over development and operation of the facility if the deadline is not met, but the seller will retain ownership of the facility. In that event, PacifiCorp would have the right to recoup all its cost against amounts the utility owes the seller.
Because PacifiCorp is a utility that operates in six states, the agreement holds that for the purposes of inter-jurisdictional cost allocation, the new qualifying facility contract will be treated under PacifiCorp’s revised protocol for cost treatment of its multi-state resources.