NLRA June Update

Dear Friends,

A lot has happened since we last wrote the NLRA membership, and we apologize for being so long in bringing you up to date. Here is a summary of developments since our last newsletter:

The Wyoming Industrial Siting Council (ISC) hearing

By now you will have heard that the Wyoming Industrial Siting Council (ISC), in a 4-3 vote, approved on June 13 issuing a conditional permit for Wasatch Wind to proceed with a 62-turbine industrial wind energy facility in the Boxelder-Mormon Canyon area of the Northern Laramie Range.

Obviously, we’re disappointed with the outcome, and with the simple fact that this destructive project has not yet been defeated. The good news is that three ISC members agreed with the Alliance that Wasatch Wind failed to establish that it met the requirements of state law to obtain a permit.

Most notably, Wasatch failed to meet the legal requirement that it demonstrate, as required by law, that it has the financial capacity to build, operate, maintain and decommission the project. Wasatch itself put on no evidence demonstrating this capacity, and sought to convince the ISC that Edison Mission Energy (EME), a Southern California electricity generating company which Wasatch is negotiating to sell the project, has the necessary resources. EME, meanwhile, is rated single-B-minus, with a negative outlook, by both Standard & Poors (S&P) and Moody’s. S&P even has EME on its list of “global weakest links” - companies that have twice the chance of defaulting as other “junk”-rated debtors. In the end, the ISC majority deferred, and conditioned the permit on a subsequent determination by the Wyoming Department of Environmental Quality of “financial capacity.”

There were numerous other problems with the ISC hearing, as well, which the Steering Committee and its counsel believe could warrant judicial review.

Wasatch wants a longer time to deliver on power purchase agreement – this could result in higher electricity rates for consumers

Meanwhile, in a matter that should be of concern to all of Rocky Mountain Power’s electricity customers, it came to our attention recently that Wasatch is seeking an extension of time on its contract to deliver electricity from the “Pioneer Wind Park” facility to Rocky Mountain Power (RMP), which currently requires delivery by the end of this year. It wants the contract extended even though the price at which RMP can buy electricity from other sources now is lower than in Wasatch’s contract. This would mean a lower cost for RMP and its customers if the contract expires because RMP could either renegotiate a lower price from Wasatch or buy the electricity elsewhere.
RMP has declined to extend the contract unless the Wyoming Public Service Commission (PSC) agrees. This is because Wasatch obtained the contract under an order of the PSC entered in June 2010, one part of which gave preferential treatment in contract terms to electricity supplied by the end of 2011 by so-called “qualifying small power production facilities”, or “QFs” (which is what led Wasatch to claim that its “Pioneer Wind Park” facility – too large to qualify – is two smaller, “qualifying” facilities).

A PSC hearing is scheduled for 9:00 – 11:00 AM on Thursday, June 23, at the PSC’s office in Cheyenne. Documents – including NLRA’s request to intervene to protect its members as ratepayers - are available on the NLRA website. For more information on Wasatch’s “gaming” of the QF qualification standards, see the NLRA October 2010 Update, also available on the website.

Obviously, while this matter is separate from NLRA’s concerns about industrialization in the mountains, it directly affects all of us as RMP customers.

We’ll continue to update you as these matters develop. In the meantime, we appreciate your continuing engagement and support.

The NLRA Steering Committee

Bret Frye Kenneth Lay
Willard McMillen Sharon Rodeman
Sally Sarvey Tom Swanson
Diemer True