Buffett-owned US utility to hit wind deadlines despite Covid-19 pressures
Rocky Mountain Power on track to add 1.15GW in new capacity and re-powering projects in Wyoming, in face of coronavirus-impacted project timelines
Warren Buffett’s Rocky Mountain Power will complete installation as scheduled this year of 1.15GW in new wind capacity and re-powering of older sites in the US state of Wyoming, despite pressure on project timelines cause by Covid-19.
The company later issued a statement in which it said the situation is "very dynamic and we are working closely with variables that make the ultimate outcome uncertain."
Even so, "we are working closely with vendors and contractors on creative solutions in order to complete the projects by the end of 2020, as we have planned."
In Wyoming, the wind projects include Cedar Springs I and II (400.12MW), Ekola Flats (250MW) and TB Flats I and II (503.2MW). The utility owns all the projects except the 200.06MW Cedar Springs I (NextEra Energy Resources is the owner).
The utility is also re-powering seven wind farms in Wyoming with a combined 637MW of nameplate capacity. Like the new facilities, they will qualify for the federal production tax credit (PTC) at 100% value – $24/MWh for power sent to the grid in the first decade – if they enter commercial operation this year.
Rocky Mountain, which also serves Idaho and Utah, is one of two utilities owned by PacifiCorp, part of Buffett’s Berkshire Hathaway conglomerate; the other is Pacific Power, which has a service territory encompassing Oregon, Washington and northern California.
Thinly-populated Wyoming has had the fewest number of fatalities from the pandemic among US states – seven of the over 81,000 recorded nationwide – and Governor Mark Gordon has shied from imposing mandatory restrictions on most business activity.
PacifiCorp, which also owns utilities in Iowa and Nevada, had 8.68GW of wind capacity on its system at the start of this year, almost 700MW more than number two developer Xcel Energy.
Rocky Mountain’s expectation that it will get all wind projects into commercial operation on time contrasts with serious coronavirus-related disruptions reported by the American Wind Energy Association (AWEA), renewables trade groups and certain supply chain companies.
AWEA has estimated Covid-19 impacts have put 25GW in project investments worth $35bn at risk, plus 35,000 of 120,000 industry jobs. Those impacts include availability of capital, delivery schedule and permitting delays, financing uncertainty, temporary component plant closures, and transportation and workforce restrictions.
The largest project developers such as Avangrid, NextEra Energy Resources and PacifiCorp have been much less affected. That’s because of their ready access to capital and ability to use their balance sheets to finance some projects, and the size, sophistication and buying power they have to lock in volume orders and sidestep most near-term supply chain issues.
Industry lobbies and their supporters in Congress are calling on President Donald Trump’s administration for help. They want the Department of Treasury to extend the PTC at present values through 2021 and temporarily make them refundable, which would ease pressure to meet tax credit-related delivery deadlines and circumvent the time-consuming search by smaller developers for increasingly scarce tax equity.