Welcome to the Utility Shareholders of North Dakota web site, we are glad you decided to take a look.

Please stop by often to check out the information about shareholders' interests as we will be making changes and adding new information regularly.

Issue 4

Wind power

First, a few basic facts.

  • 1999 was the best year ever for the wind industry in the United States. Approximately 1,500 wind turbines were put into operation and new equipment worth $700 million was installed. Even though these are miniscule figures in the overall electric generation picture, they translate into a 40 percent increase in wind generation capacity.
  • The U.S. Department of Energy's "Wind Powering America" initiative aims to boost wind-generating capacity more than 30-fold by 2020. At that level, wind-generated power will be capable of providing for the electricity use of about 10 million households.
  • Public demand for green power programs-in which utility customers can volunteer to pay a premium price for electricity from clean resources like wind-remains very small, but is growing.

On first thought, and in light of the above facts, it's nearly impossible to argue against the idea of wind power. After all, the wind is free, plentiful, and renewable. And when it blows, wind-generated electricity is capable of generating electricity cleanly and at fairly reasonable cost.

Of course, the key phrases in that last sentence are "when it blows" and "fairly reasonable cost." North Dakotans expect the steam generated electricity provided by the three investor-owned utilities that serve the state to be available at all times and at the instant they need it. And they've also become accustomed to receiving it at remarkably low cost. But because the wind does not always blow, wind power is not available at all times nor has a way been found to generate electricity as economically as with coal.

This does not mean there is no place in the generation mix for wind power. Nor does it mean that USND is opposed to further research and development. It means only that several problems inherent in wind powered electric generation must be resolved before too much dependence is placed in its ability to serve our energy needs.

Let's look at some of those problems.

In order to ensure reliable electric service, electric companies must either own or have under firm contract electric generation capacity to meet the expected demands of any particular day and hour. In North Dakota, all that required generation capacity-and the distribution system needed to deliver it-already exists, is under construction, or has been planned. That's important to remember when decisions must be made regarding the expenditure of hundreds of millions-if not several billions-of additional dollars for wind-powered generation.

And if some state or federal government agency required utilities to make that investment-despite its exorbitant cost and apparent redundancy-who should pay for it?

Only those customers in the area affected? All of the nation's taxpayers? Or perhaps only those who have invested in the utility company?

USND's stand is that the decision to add wind-powered generation to a utility company's system must not be mandated. Rather, it should be a decision made by company management for the overall benefit of the consumers, the investors, and the company.

Another concern is a provision of PURPA (The Public Utility Regulatory Policy Act) that requires investor-owned electric utilities to purchase-despite its higher cost and unpredictable nature-excess electricity from wind generators located in its service area. This requirement may or may not be economically and environmentally justified. Either way, USND's concern is the fact that rural electric cooperatives and municipal operations are exempt from this requirement. This raises again the necessity for a level playing field, in which all participants in a competitive market are required to operate under the same regulations.