Wind Powerlessness

Black Hills Power wanted some moral support from the South Dakota PUC before it built a new wind farm. It did not get it:

Black Hills Corp. (NYSE: BKH) utility subsidiary Black Hills Power indicated today that it will not proceed with a previously announced 20 megawatt wind farm near Belle Fourche, S.D., after the South Dakota Public Utilities Commission’s recent decision to dismiss the utility’s request for a declaratory ruling. Black Hills Power had requested commission confirmation that the proposed $38 million project was reasonable and cost effective considering other electricity alternatives and would be an appropriate generation resource addition to meet the energy needs of the utility’s customers.

“Reasonable and cost effective considering other electricity alternatives.” Hmm.

[BHP] sought the commission’s ruling to determine support for meeting the state’s renewable objective, since doing so would have potentially increased customer rates. South Dakota does not have a statutory procedure, as do other states, for utilities to seek commission pre-approval before constructing generation facilities. Black Hills Power therefore filed a request for declaratory ruling, an alternative legal procedure aimed at soliciting a finding from the commission regarding the wind farm project before construction. In its order to dismiss the request for a declaratory ruling, the commission said that it does not have the legal statutory authority to make such a determination.

So, the PUC does not have the legal authority to provide the needed moral support. I find it worth noting that BHP could have built the wind farm without that support–but was unwilling to do so because it might have been stuck with a lovely new wind farm and an inability to raise rates to pay for it.

In the simplest of terms: the wind farm does not make good business sense. I’m glad BHP figured that out now instead of later.

2 thoughts on “Wind Powerlessness

  1. Let’s see…”reasonable and cost effective” but it would force them to “raise their rates”. Is it just me, or is there something wrong with putting those two things together like this?

    Or, to put it more bluntley, since when is “more expensive” the same as “cost effective”?

    1. I would suppose that “more expensive” is the same as “cost effective” when the taxpayers are picking up the tab for the difference. I believe that the expiration of the credits/subsidies as the end of 2012 may be a factor in this.

      Perhaps BHP’s decision is an indicator that the windpower bubble is reaching its limits.

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