Comments Brent Petrie has made
Apples and oranges and fuel costs avoided
Tom and Gar
There is a misunderstanding in the use of 15 and 45 cents per kwh in the traffic above.
Generating and delivering power in Alaska's remote communities is a challenging and extremely expensive process. For example, our newest wind-diesel systems are over 400 air miles west of our Anchorage support center, in an area with no roads, where technician access is by air or boat when weather permits. These systems were only commissioned in July 2006 and have been in their break-in process.
Our cost of FUEL ONLY in our 2007 rates ranges from $0.1336 per kWh to $0.3918 per kWh depending on the location. The fuel cost is added to our base retail small power rate of $0.32 per kWh for the first 700 kWh which gives a retail price range of $0.4536 to $0.7118 per kWh. The wind is only useful to us to displace fuel and is not consistently available among the villages that we serve.
Our 2005 fuel costs are posted on our web site at http://www.avec.org/cust.html#RATES. Our 2006 and 2007 rates will be posted when we complete our web site update. The fuel charge is set annually by the Regulatory Commission of Alaska after a review of costs.
Readers need to be aware that fuel costs are the ONLY costs that the wind power avoids for us. The wind power does not, in any way, displace 45 cents per kWh. The 45 cents per kWh is the approximate minimum sum of our fuel cost (the cost to generate a kWh from diesel) plus the costs of delivering that kWh and administering all the other elements of utility generation, distribution, finance and operation - roughly an additional 32 cents per kWh for a customer's first 700 kWh. It costs AVEC the same 32 cents per kWh to deliver a kWh from wind. The ONLY relevant comparison is between the cost to produce a kWh from wind and the fuel cost to produce a kWh from diesel - the numbers shown above. As a non-profit cooperative, all of our costs and savings are passed along, or shared, 100% with the consumer.
The 15 cent number that is mentioned for the wind cost was our rough target cost per kWh. It is the number we felt that we needed to beat in order for the wind to be competitive with the diesel - and not actually end up costing more. The fuel charge will be revised again in early 2008 to reflect the actual cost of fuel per kWh and 100% of the savings for the fuel that is displaced by wind will be passed on to the consumers. The non-fuel costs per kWh are unlikely to change and may, in fact, go up, since the capital cost of wind turbines is so much higher than diesel per KW.
Our production experience with one prior project has been relatively poor. We did not have extra funds budgeted for O&M, and the turbines experienced considerable down time. As the cost of installing wind turbines is mostly up front, the cost per kWh of their output is a function of how many kWh they produce. The longer the downtime they suffer, the higher the cost per kWh and the less fuel displaced.
We recognized that we needed to supplement O&M if a wind project is to be successful.
Hopefully this helps clear the air.
On Legit or not? posted 2 years, 5 months ago 11 Responses