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E.ON treads water, waits results of new RFP

by Bill Knowles
WALSENBURG-
After the Public Utilities Commission decision on Jan. 5, which allows  Xcel a new Request for Proposal, E.ON Climate and Renewables is taking a wait-and-see approach to what seems like a cloudy future.
    Xcel Energy had claimed that the market cost of a megawatt of wind energy from the producer had become cheaper.  It  asked to withdraw the RFP  issued in 2009 and issue a new RFP for January 2011.  This move drew protests and motions to the PUC by several companies including E.ON Climate and Renewables in December 2010.
    The PUC stated in its decision that changed circumstances are not uncommon in resources slated for later years of resource acquisition and “…we hesitate to insert the Commission in negotiations between Public Service and wind developers.”
    The PUC also agreed that it is plausible that changes in the market did occur.  They also noted that can’t be ascertained unless the 2011 Wind RFP proceeds.  Based on these and other arguments, the PUC denied the motions put up by E.ON to stay the application and/or strike and/or postpone the issuance of the 2011 Wind RFP.
    According to Paul Bowman, the Vice President of Mountain West Development for E.ON, the PUC’s decision supporting Xcel Energy’s action is lost opportunity.  “That they [Xcel Energy] abandoned the original RFP is detrimental to landowners, the county and the state.  The lost opportunity is brutal.”
    “E.ON has resubmitted a bid on the RFP and is waiting a decision from Xcel Energy,” Bowman said.  Most of the $400 million project is slated to be built on state land which will give the state lease income from the property.
    Bowman noted that two bids for wind energy from outside the state were partly responsible for the collapse in negotiations between E.ON and Xcel Energy and were bid at about the same price as E.ON.  He didn’t name the two companies.
    However a search of the motions filed by Xcel Energy and Public Service Company of Colorado in December 2010 with the PUC shows that two companies, Northern States Power of Minnesota and Southwestern Public Service Company located in New Mexico, wanted to have “sealed and proprietary contracts and bids” protected according to PUC rules.  Both companies are a part of Xcel Energy.
    E.ON has been working on a 200 MW wind farm that runs down the spine of the Cordova Mesa in Eastern Huerfano County and south into Las Animas County.  Their HB 1041 application in Huerfano County was fast approaching final approval when Xcel Energy pulled out of negotiations that would have finalized the Power Purchase Agreement.