VINITA - Without much fanfare, the Grand River Dam Authority's board voted Wednesday to lease some of the state-owned utility's coal cars to the BNSF railroad through the end of the year.
Also without much fanfare, the board authorized final negotiations for a second long-term contract for wind-generated power.
How quickly the energy industry in the United States is changing.
The GRDA, for instance, hasn't even started building its new natural gas-fired plant at Chouteau. Wind energy is a new and still-tiny portion of its capacity.
But already, coal is playing a smaller part in the GRDA's electric generation.
By 2017, the GRDA plans to reduce its reliance on coal generation from 45 percent to 17 percent.
Natural gas production will go from 25 percent to 45 percent, and wind power will increase from 0 percent to 13 percent.
Hydropower, while theoretically accounting for 25 percent of generation capacity, amounts to much less in practice because of variations in water flows.
"Wind is a very attractive option," said GRDA CEO Dan Sullivan. "It's a good hedge against other fuel sources."
Hedging - the ability to shift from one source of generation to another as circumstances dictate - is one of the most important elements of electric utility management.
The more options, the easier it is for a utility to cope with changing conditions.
"The tax situation drives a lot of the development, but for us it's a matter of developing power at as low cost as we can," Sullivan said.
The move away from coal is driven not only by regulatory pressures from the Obama administration but also by a glut of natural gas that is driving down prices and technological advances that have drastically improved the efficiency and emissions of natural gas plants.
A boom in the building of wind generation has been powered, at least in part, by federal and state tax incentives, although wind advocates argue that these incentives are in line with those afforded oil and gas producers.
The GRDA will contract for wind power rather than build its own generation facility. A contract with Canadian Hills wind farm near El Reno is already in place and provides about 3 percent of the GRDA's capacity.
The negotiations authorized Wednesday are with TradeWind Energy, which is developing the Mustang Wind project west of Pawhuska.
Sullivan said coal is unlikely to disappear from the generation mix, though.
It remains a relatively cheap fuel that is more easily stored than natural gas and more reliable than wind.
"Coal, as a commodity, is very cheap," he said. "It's the transportation from (Wyoming) to Chouteau that's expensive. But, overall, it's stable and predictable."
Randy Krehbiel 918-581-8365
randy.krehbiel@tulsaworld.com
Original Print Headline: GRDA shifts away from coal, toward wind, gas
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