Sacramento Utility District Drafting RFQ for Second Wind Farm Project

SAN FRANCISCO — The Sacramento Municipal Utility District is drafting a request for qualifications from vendors to bid on the utility’s second wind farm, a project possibly triggering up to $250 million of bond sales over the next several years. The utility hopes to send out the RFQ by the end of September, and then would distribute to the prequalified vendors a request for proposals in December, with the goal of awarding one or more contracts next spring. The goal for the second farm would involve generating 105 to 128 megawatts per hour during consistently windy weather conditions, said Cesar J. Beltran, senior procurement professional at SMUD, who is drafting the request for qualifications. “Our technical staff will come up with the system requirements … but we’re going to let the proposers all come up with their own plans,” Beltran said of the future RFP. His preliminary draft of the RFQ indicates that the district hopes to sign at least a five-year full-service operations and management agreement along with an engineering procurement and construction contract.Beltran said firms interested in bidding on SMUD’s wind farm can register on the utility’s Web site, www.bids.smud.org, under the category “renewable power” and the subcategory “wind.” SMUD already has one of the largest wind power facilities of any municipal utility, said Standard & Poor’s analyst Paul Dyson. The utility’s first wind farm generates 39 megawatts per hour, and another 63 megawatts worth of wind turbines will be installation by this year-end, for a total of about 102 megawatts, said Larry Stark, the district’s assistant treasurer. “We haven’t borrowed for any of this yet, but we would borrow for the next 120 megawatts,” he said. “How much will depend on what it costs. It’s possible it could be as expensive as $250 million. We’d do a system financing if we took ownership of this. We wouldn’t do a project financing.”He said that SMUD generally sells bonds to reimburse for capital expenditures already made, meaning bonding might possibly occur after the 2010 target date for implementing the second wind farm.Stark also said officials would consider outsourcing as one of the possible options for the second wind turbine farm, which would sit adjacent to the existing wind farm within the unincorporated portion of Solano County. The existing wind farm consists entirely of turbines supplied by Vestas Wind Systems A/S, headquartered in Denmark. By year-end, SMUD’s wind farm will have 29 of Vestas’ latest model, the V90 turbine, each of which can generate up to three megawatts per hour. Eight of these machines are already running on the site.The facility also has installed 23 machines of an older Vestas model, the V47, each of which generates 0.66 megawatts per hour. “There isn’t any increased likelihood that we’d go with Vestas again. It’s an open bidding process,” Stark said. While GE Power owns half of the market and thus outsells other wind turbine manufacturers, the number of vendors is growing fast enough to merit the vendor shortlisting process SMUD is undertaking, said Christine Real de Azua, a spokeswoman for the American Wind Energy Association.“This year it’s going to be $4.5 billion to $5 billion of wind turbine spending,” she said. “That would be over 3,000 megawatts of wind capacity that we’re expecting to be installed this year.”