By ANN HINCH
Assistant Editor

INDIANAPOLIS, Ind. — If commercial wind turbines are to be successful, they need more than understanding neighbors and eager state and local governments – the utility companies that would buy generated power also need to be on board with their development.

“Two-and-a-half years ago, we didn’t have a renewables business,” said B. Keith Trent, group executive and president of Commercial Businesses for Duke Energy. “Today, we’ve invested well over $1 billion in renewable energy … This business is a real business, it is a viable business and it’s a business that I’m excited about,” he said, even though it’s a tiny percentage of Duke’s power generation.

Even as a big player, Duke is only one utility of several with a stake in how electrical power gets generated in the Midwest. At last week’s WIndiana conference in Indianapolis, representatives of some of those spoke at various panels about the task of integrating the capability of the state to produce wind power, with the reality of how turbine owners can store and sell the electricity.

Utilities have to know where the power will come from in the future, that they will sell to their customers – and how much it’s going to cost for them to tap into that electric production. According to the U.S. Energy Information Administration, over 90 percent of Indiana’s electricity now comes from coal; another small percentage is from natural gas and an even smaller amount is from renewable resources such as wind.

A growing number of states – though not Indiana – have enacted mandates for how much of their total electricity is to be generated by renewable resources in the near future; a federal mandate seems on the horizon, possibly this year. Normally, utility companies consider individual projects to take onto their power grid, such as wind farms – but to be most efficient and cost-effective for customers, they need to consider the bigger picture, said Beth Soholt.

Soholt is executive director for Wind on the Wires, a nonprofit created to find ways to bring renewable energy sources to market, whose board is made up of renewables companies representatives. She said utilities need to determine overall power transmission needs and development including wind power over the next few decades.

At least some Midwest utilities are doing studies and creating plans with more labels than it seems possible to keep up with (“Just to get past and understand all the acronyms in this business is hard enough,” Soholt observed). There’s RTEP, or the Regional Transmission Expansion Plan, from PJM Interconnection, a regional transmission co-op that boasts 51 million customers.

PJM keeps a running queue of project requests it has to review, said Paul McGlynn, general manager of its System Planning Division. Nearly 65 percent of the co-op’s renewable-energy project requests (of which wind is only a part) are in the northern portions of Ohio, Indiana and Illinois, despite PJM being based mostly in the Mid-Atlantic region.

Then there’s RGOS, the Regional Generation Outlet Study from Midwest ISO (MISO), another Midwest nonprofit transmission co-op. American Electric Power did a transmission study for its management, for needs in the upper Midwest over the next 30 years.

At Duke, Trent said development plans are held up by some concerns. For one, federal legislation on renewables is still up in the air; too, there is not a defined tax policy for the wind industry. There are also questions about future sources of natural gas; and questions about when the economy will recover and its effect on the cost of electrical generation. “All of these questions have led to tremendous uncertainty,” he said.

If society as a whole is going to have to pay the extra cost of bringing wind power online even to benefit from it in the long term, said Soholt, her organization wants it to be as reasonable a cost as possible.

MISO alone has identified 11 wind projects that would meet broad regional needs into the future, and the feeling is that the costs of all should be shared – but who will pay that bill is the question. Will it be utilities? States? Federal incentives? A combination? In any scenario, utilities customers will bear some direct cost. “There is no getting around … There is going to be a replacement cycle that rate payers will have to bear” for updated transmission equipment, Soholt said.

She noted part of the proposed cost is in getting wind electricity from point A to B. “It’s usually windy where a lot of people don’t live,” she explained, pointing out the best wind in the country is in the sparsely-populated Plains states, while the denser East Coast has much less wind.

More portable energy storage is also needed, said McGlynn, as well as “smart” technology for the electrical grid. What impresses Marc Lewis is how well wind power business is developing in Indiana without a state-level mandate. The Indiana Michigan Power vice president of External Relations said so far, the Hoosier government has used incentives rather than mandates to attract wind farm developers.

According to Lt. Gov. Becky Skillman, 15 companies have some sort of involvement in wind projects in Indiana right now and more than 30 businesses are involved in manufacturing wind equipment. Fowler Ridge Wind Farm in Benton County – a BP and Dominion Resources property – alone has the capability to supply 120,000 homes with “green” electricity, she said.

“We work so hard to earn the trust of every partner who makes an investment in the state of Indiana,” she said, adding Gov. Mitch Daniels’ philosophy is that government cannot create prosperity, but can create an environment where prosperity is possible.

In 2009, she said Indiana was the fastest-growing state for wind power, and it’s still going strong. News reports state Brevini Wind USA will open a turbine gearbox manufacturing center in Muncie later this year; Skillman said this means 450 new jobs.