WESTFIELD – The Westfield Gas & Electric Department has pursued a policy of power supply diversity as a means of buffering ratepayers against the vagaries of the price volatiles of both the natural gas and electric market which have become linked to a greater degree than in the past because of reliance on natural gas-driven electrical generation.
When gas prices soar, as they have for the past two years, those increases are now directly reflected in higher electricity costs because of the regional reliance on gas powered generation.
One strategy the municipal utility has adopted to protect customers from energy price spikes is to acquire a power supply portfolio that is not heavily reliant on one source of power generation.
WG&E General Manager Dan Howard said the utility assesses opportunities to diversify that energy portfolio, and in some instances to consider “renewable” energy sources.
“The Department of Public Utilities encourages utilities to investigate clean energy, but in has to be in the interest of not only the environment, but also our rate payers,” Howard said Friday.
The WG&E is participating, through the Massachusetts Municipal Wholesale Electric Company (MMWEC) in a wind generation project that will be constructed in the near future and begin to generate electrical power in June of 2015.
“It gives us some diversity which deflects our ratepayers from the (energy) market volatility,” Howard said. “It seems like a good fit for us.”
The project, First Wind, an independent Boston-based company, will erect 17 turbines with a capacity to generate three megawatts of power each for a total of 51 megawatts. First Wind currently operates five wind generation projects in Main and Vermont and is building four solar projects in Massachusetts.
Howard said that MMWEC is purchasing 37.5 megawatts of the total generation, while Burlington Electric in Vermont is purchasing the remaining 13.5 megawatts. Westfield is purchasing 4.5 megawatts of generation.
“There are several points we looked at. One was that it is renewable power,” Howard said. “The second is that we’re purchasing that power at a flat fee with no escalation function during the term of the 25-year contract. The third is that we only pay for the power it generates, and not fronting capital for it.”
“We will only pay for output, so it is a pretty attractive deal for us to get involved with,” Howard said.
MMWEC is comprised of 21 municipal utilities with 17 of the member utilities opting to participate.
Westfield is also evaluating its participation in a joint wind turbine project with the Russell and Chicopee municipal utilities. Russell initiated the project with a potential to generate between four to six megawatts of power. The turbines would be located on a 256 acre site, called Holiday Hill, off Pine Hill Road in Russell.
Howard said the Russell Holiday Hill project is still under review as wind speed data is collected to allow the utilities to determine if it is a viable wind generation project.
“The First Wind is a more favorable project for us at this time because it has gone through that review before it became a viable project.”
