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Chuck MacFarlane, Fergus Falls, Minn., letter: Wind power costs must be shared

By Chuck MacFarlane FERGUS FALLS, Minn. -- In response to the letter from Jim Kambeitz of Bismarck, I believe that the Federal Energy Regulatory Commission made a fair decision when it unanimously accepted the Midwest Independent Transmission Sys...

By Chuck MacFarlane

FERGUS FALLS, Minn. -- In response to the letter from Jim Kambeitz of Bismarck, I believe that the Federal Energy Regulatory Commission made a fair decision when it unanimously accepted the Midwest Independent Transmission System Operator's proposal to temporarily change the cost allocation method for transmission lines associated with new electric generation projects, including wind farms ("Don't put brakes on wind power, Page A4, Oct. 27).

Robust development of renewable energy is necessary if we are to meet our nation's future energy needs.

Otter Tail Power Co. strongly supports wind energy expansion in North Dakota. In fact, the U.S. Department of Energy's 2008 Wind Technologies Market Report, using data from the American Wind Energy Association, ranked Otter Tail Power Co. third in the nation in amount of wind energy as a percentage of retail sales.

And this was before we completed our third major North Dakota wind farm at Luverne, N.D.

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But as wind resources are developed in North Dakota, we must make sure that the development costs are borne by all who benefit.

Until FERC's Oct. 23 decision, wind power developers who asked to connect new projects to the transmission system had to pay only half the cost of any upgrades required by the projects.

If a project would have required a new electric substation or power line, for example, the local utility's customers and the wind power developer would have split the cost to interconnect power that the local utility's customers never would have used.

Currently, Otter Tail Power Co. has almost 9,500 megawatts of pending requests from wind developers to connect to the transmission system, which is about 11 times more than all of our existing generation -- wind, coal, natural gas and oil.

We likely could have driven up our customers' monthly bills by 18 percent to 30 percent annually if only 20 percent of these projects were actually built under the original MISO cost allocation method.

Because many of the recent wind energy facilities that have been or will be built in North Dakota are for export to other states, a more equitable way to distribute costs is imperative.

That will be the focus of a longer-term solution to be brought to FERC by Midwest Independent Transmission System Operator next July.

Otter Tail Power customers should not be asked to pay 50 percent of the total cost of interconnecting energy they will not use. These customers should not be penalized for living in an area that is rich in renewable resources.

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Again, FERC's decision was fair. I believe support for wind development in North Dakota would disappear if the state's electric rates jumped for wind farms built to serve customers in cities such as Minneapolis, Milwaukee and Chicago -- rather than to benefit cities like Jamestown, Devils Lake, and Wahpeton, N.D.

MacFarlane is president and CEO of Otter Tail Power Co.

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