USA - Cost wind-generated power again higher than conventional power

For Xcel Energy customers who enjoyed a price advantage by using the Windsource voluntary green-power program the party is now over. Customers who buy all their power through Windsource now are paying about $5 more a month than regular Xcel customers. That reverses a recent 6-month period in which subscribers to the wind-generated energy program enjoyed electric rates as much as $10 a month lower than their neighbors who paid regular rates for conventional power. Windsource costs haven't changed, but the cost of conventional power varies along with price changes in natural gas and coal - the two major fuels Xcel uses to generate electricity.

The 9-year-old Windsource program got a huge enrollment boost last November when soaring natural gas prices raised the cost of Xcel's conventional power. That marked the first time that Windsource was cheaper than regular electricity. Xcel was inundated with phone calls from new Windsource applicants, and the program's enrollment quickly jumped from 30,300 customers to 34,360, with 300 more on a waiting list. But because of a mild winter nationwide, natural gas supplies remained strong and prices went down. As a result, Xcel last month reduced its conventional electric rates to a level lower than Windsource. Xcel customer Lynn Adams of Littleton, Colo., said he has no plans to quit Windsource despite the price reversal.

If anything, Adams said, he values the wind program because its rates stay relatively constant while conventional rates fluctuate with fossil fuel prices. "The main reason I do it is for stability," he said. "Gas prices go up and down, and I basically see them going up in the future." But Windsource prices also could rise as part of an electric rate increase request that Xcel has filed with state regulators. Under the proposal, Windsource costs would rise from $3.79 to $4.29 per 100 kilowatt-hours. The typical Colorado home uses 625 kilowatt-hours per month.

Xcel said it is asking for the rate increase to keep Windsource prices higher than conventional power. "This is a premium price program and customers that elect to join the Windsource program have decided to pay more to build up wind power," said Xcel spokeswoman Ethnie Groves. "This was never designed to be competitive with traditional generation." Wind generation proponent Rick Gilliam of Western Resource Advocates of Boulder, Colo., takes issue with Xcel's position. "The goal is not to have people pay a premium," Gilliam said. "They signed up to use a renewable resource, and if that cost is cheaper, so much the better."