Posted in the Hubbardston Forum
PMLD admits wind facility is losing money, raising rates
September 12, 2012 by Brian Allen, General Manager of PMLD
This letter written by Princeton Municipal Light Department's (PMLD) General Manager, Brian Allen, offers a candid assessment of the utility's two-turbine (3.0 MW) project. The turbines have failed to live up to expected production levels and has been plagued with technical problems. Rather than reducing rates for customers, the project lost $1.875 million and will continue to lose $600,000 yearly under current circumstances. Excerpts of the letter are provided below. The full letter can be read by clicking on the link at the bottom of this page.
In 2011 the wind turbine project lost $628,000. Since January 1, 2010 and through June 20, 2012 the wind turbine project has lost $1,875,000. This is after credits for renewable energy production. These loses fall to the PMLD customers.
In 2011 PMLD electric rates were 36% higher than the average rate for Massachusetts residential customers. The average PMLD customer using a little over 800 KwH a month paid $516 more for electricity in 2011 than the average Massachusetts customer paid. Compared to average Massachusetts residential rates Princeton customers paid in total an additional $774,000 in 2011.
The original projection for the wind turbine project showed that Princeton residents would receive a financial advantage. In fact, Princeton residents have suffered a financial lost. The original projections overstated both the kilowatt hours produced as well as the price of electricity and understated the expenses associated with the project.
Before the wind turbine project, the PMLD was in a more solid financial position than it is today. The PMLD had relatively little debt and its customers paid just slightly more than the average Massachusetts customer for electricity. For example, in 2005 our total liabilities were just under $1 million.
At best, I can look into the future, I would expect the wind turbine losses to continue at the rate of around $600,000 a year. This assumes current wholesale electricity rates, no need for extraordinary repairs and that both turbines continue operating. If any major repairs are required this will be an additional expense for the PMLD. The original warranties on the turbines have expired and extended warranty options are not available.
The original projections were based on the wind turbines producing roughly 9,000 MWh a year. Based on 2 1/2 years of experience, a better estimate is 6,500 MWh a year with both turbines running. This is roughly 28% less than originally expected. Furthermore, the original projections were made when wholesale electricity rates were higher and assumed our excess wind turbine production would sell for $80 a MWh. The average wholesale rate during the first six months of this year was $31 a MWh. It is currently running at around $35 a MWh. The breakeven point for the wind turbines project is a wholesale electricity rate of $125 per MWh.
Editor's Note: According to PMLD's website, PLMD is a non-profit public service corporation that provides "reliable and low cost electric service to the residents and businesses of the Town of Princeton, Massachusetts."
PrincetonMunicipalLight-Letter .pdf (1.34 MB)
It is nice to want "green energy" alternatives, but it has been proven time and time again that our technologies for green energy alternatives isn't cost effective enough yet.
Each time we try to utilize green energy alternatives, the costs outway the benefits...we need to wait until the technologies are efficient enough to make sense.
The same thing happened at the Portsmouth,Rhode Island High School wind turbine . That turbine is three years old.
The Rhode Island wind turbine was built by AAER of Canada. There were many companies assembling wind turbines that were made by Furlander . The wind turbine industry is hiding the fact that these gearbox drives only last about 5 years if that !
It's just enough to get them out of the warranty period .
They knew in 2004 the gearbox issues at the NREL and went forward anyway . The wind turbines are a big scam in which politicans and their buddies are cashing in on wind turbine sales ! Half the people in Gov Patricks political group have passed legislation and gone on to work for wind turbine contractors .
The news media bought into the wind turbine scam through its Democratic counterparts at schoold like UMass .
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