I thought you might enjoy knowing what our part of the Federal Government is attempting to do in this "wind" area. GSA, Greater Southwest Region, has published a "sources sought notice" in the government's electronic business portal (Fed Biz Opps) inviting the wind energy industry, and others, to contact us to discuss their abilities, limitations and constraints. We have done this with a view toward learning how best to make use of renewable wind energy for federal government buildings. These discussions with industry are intended to help us to identify a viable transactional structure for federal wind energy procurement. Once our market research and our discussions are conducted we expect to issue a "follow on" "wind power" procurement in the future when our current power contract expires. There have been a number of wind power purchase efforts in the past, but these have mostly been for single facilities, or percentages of a building's load. There have been some wind purchases for the military installations, or other unique situations. To my knowledge, this is the first attempt by a government agency to transition large numbers of multiple building loads to supply from a renewable wind resource. If it is successful, significant progress will have been made, and hopefully it will serve as a model for other federal agencies, and private sector firms, with multiple properties in their portfolios.

Currently, we have bundled our building loads together for deregulated areas of the Texas power markets, and use electronic reverse auctions to obtain competitive pricing. Our aggregate load is approximately 132 million kWh per year for some 84 buildings in Texas. Service of this load would require a 40 to 50 megawatt wind farm.

As you know, most wind farms currently sell to utilities which in turn re-market to retail customers, after adding a premium or markup. Our idea is to work directly with the wind farms and to eliminate the markups capturing the added value for the taxpayer. We will of course have to consider T&D costs, scheduling and dispatch, etc. but will leave this to knowledgeable industry parties to address. In our view, the solid "credit rating" of the federal government, and long term "fixed price" contracts can benefit both the wind farm developer (in arranging financing) and the government as a consumer. Since our budgets and utility costs are large the savings can be significant.

We have watched the price of fossil fuels escalate over time. With wind generated power being cost competitive, we would like to shift large percentages, or all, of our load to cost effective wind power. The five states of the Greater Southwest Region of GSA generally enjoy lower power costs than the rest of the nation. Nevertheless, we see opportunity to use wind power as a kind of "hedge" against increasing fossil fuel costs in the future. Obstacles exist to our ability to make use of wind power. For example, the federal government is presently limited by law to ten year contract terms, for utility contracts. Wind projects are capital intensive up front, and while they have no fuel costs during their life span, a longer contract term would allow better financing of transactions. It would also allow the government to lock in low wind power prices for a long period of time. It is difficult to do something in the government for the first time as no existing policy or guidance exists as to how to do it.

I noted in your article that some wind farm developers were seeing "payout" in five years. This is encouraging.

We anticipate many advantages of shifting government building loads to "wind power" including lower building operating costs, freeing up existing generation capacity to service population growth, (without the need for new plant construction), better air quality and reduction of nox and particulates, diversity of energy supply, benefits to the local regional economy of wind development, and others. In addition, as your article noted moving to wind generation or other renewable generation would relieve pressure from the volatile natural gas markets hopefully favorably impacting prices for that fuel commodity.

Kevin Myles
U.S. General Services Administration