The Western Area Power Administration says its deal to buy up to 50 megawatts of wind power per year from Bismarck-based Basin Electric Power Cooperative for three years is a "precedent setting" way to meet its power demands and support renewable energy.
Financial details were not released. WAPA says it will buy the power from 2010 through 2012.
Drought has plagued the Missouri River Basin for eight straight years, lowering electricity production. The six power plants on the river generated a record low amount of electricity in July, the U.S.
Army Corps of Engineers says. Total energy production this year is expected to be half the normal amount, down to 5 billion kilowatt hours.
WAPA, one of four such agencies within the U.S. Department of Energy, sells power to cities, rural electric co-ops, American Indian tribes, federal and state agencies, and other nonprofit providers. When it cannot fulfill its contracts with hydropower, it must buy power elsewhere.
"Our greatest challenge is to purchase replacement energy at the least cost to our customers and also minimize our exposure to short-term market risks," said Jody Sundsted, the power marketing manager for WAPA's Upper Great Plains Region.
WAPA markets power in 15 central and western states. WAPA spokeswoman Carolyn Hinkley said the wind power it will buy from Basin will be used to supplement electricity for Upper Great Plains customers in North Dakota, South Dakota, Montana, Minnesota, Iowa and part of Nebraska.
Basin works with WAPA to supply 126 member rural electric systems in nine states, which in turn distribute electricity to about 2.6 million consumers.
"Basin Electric and Western have a long history of working together," said Wayne Backman, Basin's senior vice president of generation. "The contract to provide Western with wind energy... continues that long-term good working relationship."
Most of Basin's electric supply is generated by coal-powered plants. The co-op owns two wind turbines near Minot and two near Chamberlain, S.D., and buys the energy output of wind farms operated by Florida-based FPL Energy LLC near Edgeley and Wilton in North Dakota and Highmore in South Dakota.
An expansion is planned at the Wilton Wind Energy Center, and a Basin subsidiary is developing a new wind farm near Minot. When all the systems are operational, they will produce 300 megawatts of electricity, Basin spokesman Daryl Hill said. One megawatt is enough to power 800 typical residential homes.
"There's lots of wind going on in our neck of the woods," Hill said.
Hinkley said WAPA might buy more wind power in the future. The agency expects to soon gauge interest among renewable energy producers for a contract as long as 15 years.