$4 billion invested in wind farms would generate $400 million a year in profit for the city.

Seattle City Light is owned by the city of Seattle.  As such, it is under the direction of the City Council through a Superintendent appointed by the Mayor.  One City Councilperson is selected to the Council to oversee City Light.  When I ran for City Council in 1999, I publicly forecast that there was going to be an electricity shortage in the near term, and advocated then as now for a crash program to bring wind turbines into the City's portfolio.  I did not win that election against Peter Steinbrueck, and Heidi Wills beat Charlie Chong in another race and was placed in charge of City Light oversight. A few months later  I wrote the following  e-mail to Ms. Wills:

02:54 PM 6/6/2000

Dear Heidi,
   Thanks for holding the Renewable Energy hearing on June 1.  I'm glad to see that you and Richard and Jim are taking a hard look at the long term interests of the city and the region.  I recently attended the Seattle Summit on Climate Change and the Windpower 2000 conference in Palm Springs last month, and as you know have been advocating for a big move to windpower for a couple of years.  As Rachel mentioned at the hearing, the thinking on whether to take a green marketing approach or including a green component to the mix is evolving in peoples minds, my own included.  I agree with Rachel that the two approaches are complementary, but it also seems possible that with enough political will, the marketing could be obviated if, for instance, the City looked beyond the short term thinking of the City Light Strategic Planning Dept. and decided to go 100% green now.  This would also obviate the need for the city to aggregate its windpower purchases with other municipalities if the the city itself bought about 500 MW of windpower now.  As Richard pointed out, the real long term costs of power for the region are not truly reflected in the common accounting costs, since they only consider the next 20 or 30 years.  The cost of about 5 cents/kWhr for wind is not bad in itself, but is actually lower than that in the long term, since the wind is not going to stop blowing in 20 or 30 years, and, with proper maintenance, the wind turbines should keep going indefinitely, or at least the tower and power infrastructure is permanent and the turbines can be replaced with more efficient ones after their nominal lifetime is reached.  Coupled with the 2 or 3 cent hydropower supplying almost half the City needs, 5 cent windpower (which is really less in the long term) can feasibly supply almost all of the non-hydro demand.  As was pointed out, the Wyoming site potential is 5000 MW, which is ten times what Seattle would need.  I spoke to Ken Hach of Enron at the Windpower conference who told me his company owns sites there and could supply power to the grid there now for "3 cents/kWhr".  There are also class 5 wind areas just east of the Cascades, so that we might benefit the state economy more and have less of a transmission problem by considering in state wind farms.  Given the City Light Strategic Planning doubly screwed up last time out by going ungreen and costing the City a lot of money by not using its hydropower quota, I seriously suggest that the City Council sponsor an independent review of the feasibility of a 100% green city program now.  How much would this add to the average consumer's bill?  It's seems to me that maybe it would add just one or two cents per kilowatt hour in the short term, to be made up for by long term price stability and lower than otherwise prices in just a few years, maybe even before the next election?  It would be smart politics because the City Council of Seattle would overnight become environmental celebrities throughout the world, enabling a meteoric rise of the Council members to higher positions and freeing up Council seats for newcomers;)  For example, it would take a green Governor and Legislature to impose COx, NOx, and SOx externalities across the state, creating a fairer sharing of the cost of going green.
   As far as the transmission limitations mentioned at the hearing, I think they are overstated for two reasons, and that a study should be done to validate my intuition.  The Bonneville website shows that the peak hydropower is about 16 GW and the average is 8GW, so adding 500 MW of wind for the City should be able to be absorbed by the dam system except on rare peak occasions.  Maybe some lines would need to be beefed up, but the irrational prejudice about new transmission capacity needs to be overcome, it seems a outdated fear of the bean counters at the strategic planning departments around the country.  The public is now much more ready to buy the excuse that the extra short term costs are going to save the planet, which is the truth.   New transmission need not be necessary anyway for a second reason, one which was not on the radar screen last week but should have been, namely the emergence of fuel cells for local electricity production.  www.plugpower.com  is now field testing 250 kW natural gas fed systems which should be on the market next year.  www.ballard.com is about to go into mass production of 80 kW units which should only cost about $3000 in a few years.  Instead of building new central gas plants around the state, we should be encouraging residential and small scale commercial onsite electricity production.  Under the right local regulatory framework, i.e. better net metering and utility purchase laws, the total demand on the grid can be reversed, freeing up more capacity for wind energy transmission.  Developing the fuel cell market would help move toward a day in the not so distant future when wind derived power could produce hydrogen for automotive use at a price per mile competitive with gasoline, at which point we can move toward completely clean air.
   Once again, thanks Heidi for taking the lead on this issue.  I'd like you to ask Strategic Planning to tell you what it would cost the City to go 100% green now, 40/60 Hydro/Wind.  I am willing to study this problem further myself if it could be of help to you.
  Sincerely,
    Stan Lippmann Ph.D., J.D.

Ms. Wills never replied to this e-mail.  Six years later, City Lights' latest Annual Report begins:

City Light is central to the history of Seattle and to the development of public power in the Pacific Northwest. We begin our second hundred years responding to the last great challenge of the previous century – the energy crisis of 2000-2001. This event resulted in $600 million of unplanned energy costs, significant additional debt, delayed investments in infrastructure and maintenance, and major challenges relating to managing water supply and energy price risks.

So what did the City Council do after losing $600 million dollars, they authorized Seattle City Light to purchase wind power from the Stateline Wind Energy Center built just after the crisis. According to City Lights' latest  2005 Annual Report, it has purchased the following amount of wind power from this wind farm at the following rates since then.

Below is a map of wind power potential from the west coast map above superimposed on northwest Washington.  The dark blue regions near Seattle are class 5, which makes this area  economically competitive with conventional energy sources for the production of wind power I propose for development by Seattle City Light.  According to the latest information from the American Wind Energy Association, there are already 390 MW of turbines operating in Washington and 430 MW under construction. 

One of the projects, for example, is the WILD HORSE WIND POWER PROJECT, under construction for Puget Sound Energy.   According to the RFP cost quotes evaluated by PSE, seen below, shows that at present wind is the least expensive way to add new capacity.  The project will add 230 MW of turbines.  At 30% average utilization, this yeilds about 70 MW_ave, or about 612,000 MWhrs per year. According to BusinessWire, "PSE anticipates spending up to $380 million on Wild Horse, including the cost to acquire the land, the wind turbines and other necessary assets, construction costs, as well as transaction, financing and other costs."  Assuming a 20 year mortgage at 5% interests, this implies $240 million in principle and $140 million in interest.  The annual payment is about $19 million.  The cost of production this therefore 19,000,000/612,000=$31/MWhr, or about 3.1 cents per kWhr.  City Light charges about 8 cents/kWhr on average, so after allowing 2 cents/kWhr for transmission and operating costs, the profit for a wind farm this size would be about 3 cents/kWhr, or $30 per MWhr.    Multiplying this profit by 612,000 MWhrs per year yields an annual profit of about $18 million per year.   By constructing 9 plants of this size, Seattle would generate the other 600ave MW of its needs, coupled to and matching the output of the city-owned Boundary dam, meeting all of our needs for about the same cost of power over the past five years, while making an added profit of about $160 million a year for the City.

As stated above, Seattle City Light gets just under  half  of its 1200 MW from the BPA at about $20 per MWhr.  The chart below shows that the nearby California Wholesale market has averaged about $64 per MWhr.  The BPA contracts are up for renewal in 2011.  By having our own supply, the BPA could not double or triple our rates or we simply wouldn't wouldn't buy from them.  By increasing the overall supply locally, we would, with competent lobbying, gain leverage to keep the rates at the current levels, enabling us to get our fair slice of the Bonneville power, and then turn around and sell this surplus power for a large profit on the California market, e.g., 500 MW x ($64-$20) x 24 x 365 =$193 million a year.

Transmission Politics

Seattle City Light gets half its power from the Boundary dam in Metaline, WA, indicated by the green arrow in the upper right hand corner of the map below.  Bonneville "wheels" the power to Seattle.  The wind turbines would need to tie in to the feed near Chelan or Wenatchee, so there would not be excessive new demands for transmission.  The Bonneville lines from the east will be somewhat unburdened, so they ought to be cooperative.  There is already a formal procedure for getting them to add lines for wind projects to their system. There are already  in excess of 3000 MW of new wind transmission lines proposed, so it should be able to readily demonstrate the feasibility of transmission from the east face of the Cascades.  It simply hasn't been done yet because Seattle hasn't yet asked the BPA to do the study.