Dive Brief:

• Westar Energy and Kansas Gas and Electric Co. have proposed a new renewable energy product aimed commercial and industrial customers that will provide wind capacity cheaper that the utilities' current offerings.
• The proposed Direct Renewable Participation Service (DRPS) tariff would allow large customers to purchase wind capacity from a new, local wind generation source either owned by the utility or secured under a power purchase agreement.
• Customers would need average monthly peak demands of at least 500 kW to sign onto the tariff. According to Westar, the new renewable energy option will incentivize economic development and help attract and retain businesses in the state. 

Dive Insight:

Westar has three renewable energy offerings right now, but one of them has zero customers enrolled. The wind energy it offers is significantly higher-priced than current PPAs, leading the utility to seek new ways to meet growing corporate demands for green energy.

Westar's Wind Generation Service "was designed to allow commercial and industrial customers to purchase blocks of wind energy," the utility told regulators in its application this month. However, it currently has no subscribers to the tariff "because the WGS price is significantly higher than the current market price of wind generation."

The new proposed wind tariff aims to give larger customers access to emissions-free energy at a more competitive price, particularly as more companies make clean energy a part of their corporate philosophy. Westar says its proposed DRPS "has tremendous value as an economic development tool."

"Businesses are placing a high priority on these principles when selecting a location to locate new facilities or expand existing facilities," the utility said. "As a result, Westar's ability to procure local, low-cost bundled renewable energy and offer that product to businesses considering locating or expanding in Kansas will help set Westar and Kansas apart from other utilities and other states."

Energy prices under the DRPS tariff would be fixed for the term of the agreement and would be determined in one of two ways. Prices would be eiter equal to the sum of the actual PPA price for the new wind generation, or the levelized average cost of the new generation plus payment for the cost to move the power to the customer based on estimated transmission and related costs and an additional payment to cover the cost of balancing wind generation with the customer's load.

Chad Luce, Westar Energy vice president of customer relations, told regulators in filed testimony that "many of our largest customers have already stated a keen interest in subscribing to the proposed tariff."

Making the new tariff available "will improve economic development prospects to aid state and local development
organizations in their quest to grow jobs in Kansas," Luce said.