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Rocky Mountain Farmers UnionRocky Mountain Farmers Union Cooperative Development Center
FUSA Insurance Agencies
Western Extension Committees A l M tiAnnual Meeting
Renewable Energy Development Considerations
Tony Frank
January 7, 2009
Tony FrankDirector, Renewable Energy Development
fwww.rmfu.org
Presentation Outline• RMFU – About us
• Collaborative Efforts/Linkages for Renewable EnergyRenewable Energy
• Opportunities/Challenges for…– Behind the Meter– Preparing for Commercial Scale Projects
• A model for Commercial Scale Wind Development: Landowner WindDevelopment: Landowner Wind Associations
Rocky Mountain Farmers UnionRocky Mountain Farmers Union• General Farm Organization founded in
19071907
• 23,000 Members in Colorado, Wyoming, , , y g,and New Mexico
• Not a labor union but a united effort to• Not a labor union –but a united effort to support activities beneficial to family farmers and rural communitiesfarmers and rural communities
• www.rmfu.org
Farmers Union Service AssociationI A iInsurance Agencies
102 I A t i• 102 Insurance Agents in Region
• Product Coverages for Every Need: Home, Farm, Auto, Commercial…
• Renewable Energy gyProducts! Liability, Property and Mechanical Breakdown
RMFU Cooperative D l t C tDevelopment Center
www.co-ops.org
• One of 23 USDA supported Cooperative Development CentersDevelopment Centers
• Established in 1996• Identify Cooperative Projects to Provide
Technical Assistance:– Local Food Marketing Opportunities– Renewable Energy– Economic Development
Recent Coop Activities…p• High Plains Food Cooperative
– Consumer Members – Front Range consumers gpurchase from local agriculture producers in Colorado and Western Kansas
hi h l i f d– www.highplainsfood.org• Colorado Renewable Resource Cooperative, Inc.
– Producer/Marketing Members – foresters in Park– Producer/Marketing Members – foresters in Park County, CO Area seeking markets for wood chip biomass
• Landowner Wind Associations– Marketing Coop - 7 landowner wind associations
formed in Southeast Wyoming marketing windformed in Southeast Wyoming marketing wind resource and stronger negotiation position
Rocky Mountain Renewable Energywww.HomeGrownPower.net
• Wholly owned subsidiary of RMFU
f• Partners for energy solutions:– Lightly Treading, Inc.
– Headwaters Energy & Finance/Modern Energy Plan
– SolSource, Inc.
RE/EE “T lkit” f R l C iti• RE/EE “Toolkit” for Rural Communities
Networks/Linkages/CollaborationNetworks/Linkages/Collaboration• Rural Prosperity Project - RMFU and
I d d t B k f C l dIndependent Bankers of Colorado Education Foundation
• Community Wind Finance Compendium – Hackstaff Gessler, Law FirmHackstaff Gessler, Law Firm
• Colorado Harvesting Energy Network (CHEN), www.harvestenergy.org
• 25x’25 www 25x25 org• 25x 25, www.25x25.org
Finance CompendiumColorado Community Wind ProjectColorado Community Wind Project
Development Consideration• Paper for rural Colorado interests pursuing
community wind projects (locally owned projects) – identifies options to consider
• ©2008 IBC Education Foundation
• Hackstaff Gessler LLC
IBC Education Foundation A 501(c)(3) Nonprofit Organization
• Hackstaff Gessler LLC• Contact IBC, www.ibcbanks.org
Renewable Opportunities/ S• Net Metering/Interconnection Standards –
Statewide (HB 08-1160)
• REA Rebate Programs (GEO and REAs matching funds) – www.colorado.gov/energyg ) g gy
• ACRE Grant –Colorado Dept. of Agriculture
• Farm Bill – Section 9007 – REAP Program
• Colorado Carbon Fund – Carbon Markets –Colorado Carbon Fund Carbon Markets www.ColoradoCarbonFund.org
REA Li k t L l B k “G f• REA Linkages to Local Banks – “Green for Green” programs
Rural RE/EE IncentivesRural RE/EE Incentives• Net Metering• USDA Section 9007 Grants• USDA Section 9007 Grants
– Grants up to 25% of cost– Guaranteed Loans up to 25% of cost – Contact USDA Rural Development Office– Contact USDA Rural Development Office
• Colorado ACRE Program– Renewable Energy Grant Program for Agriculture Producers
(S t F ibilit St di P j t D l t R h)(Supports Feasibility Studies, Project Development, Research)– Grants up to $100,000– Contact Colorado Department of Agriculture (303-239-4100)
• USDA NRCS Conservation Innovation Grants (CIG)• USDA-NRCS Conservation Innovation Grants (CIG)• Rebate Programs ($2/$4 per Watt)
- Contact Governor’s Energy Office, (303-866-2100)gy , ( )
• Federal Tax Credits/Accelerated Depreciation
ColoradoNew Net Metering StandardsNew Net Metering Standards
for REAs and Munis
• House Bill 08-1160 (effective 7/2/08)House Bill 08-1160 (effective 7/2/08)
• All REAs and Municipal Utilities over 5,000
• 10 kW for Residential Systems
• 25 kW for Commercial/Industrial
• Credited at full kW hour rateCredited at full kW hour rate • Monthly roll over
• Annual “true up” – REA options
On-Grid Wind System without yStorage
Meter
InverterAC
Windturbine
LoadLoad
Meter Configuration For Net Metering
Cumulative net energy is recorded.The account is settled either monthly or annually.
Utility ConsumerUtility Consumer
Meter Configuration For “N t Billi ”“Net Billing”
Net energy is recorded instantaneously as either a h lpurchase or a sale.
Utility sells at
Utility Consumer
the retail rate
y
Utility purchases at “ id d t”an “avoided cost”
(typically 1-3 ¢/kWh)
Interconnection AgreementInterconnection Agreement• Some utilities use a simple form for
interconnection of small turbinesinterconnection of small turbines
• Insurance Requirementsq
• Compliance with accepted standards to f t d t blensure safety and acceptable power
quality:– IEEE 1547 and UL 1741– National Electric Code
Off-Grid or On-Grid Wind System with Storage
Meter
Inverter
Regulationand
conversionAC
conversion
Windturbine
LoadThis system has storagewhich provides backup
powerpower.
Net MeteringN i id i Net metering is available in 42 states + D.C.
NH 100
www.dsireusa.org August 2007
100 NH: 100MA: 60RI: 1,000/1,650*CT: 2,000*
100
100
4020
25no500
VT: 15/150
10/400
PA 50/3 000/5 000*
10050 * *
**
*
* **25/2,000
* 25/100 30
*
80,000
1,000
100
2,0001,000
no limit
25/300
500 PA: 50/3,000/5,000*NJ: 2,000*DE: 25/500/2,000MD: 2,000DC: 100VA: 10/500*
15
10 25
varies
*
*
***
* **
*
20/100*
25 *100
*
40*
5050
10/100
25/100 varies
VA: 10/500***
State-wide net metering for certain utility types (e.g., investor-owned utilities only)
Net metering offered by one or more individual utilities
State-wide net metering for all utility types
*g y
(Numbers indicate individual system size limit in kilowatts. Some states’ limits vary by customer type, as shown)
Other Local ConsiderationsOther Local Considerations
• Zoning
• Permits Required–Installation–Electric–Electric
USDA Farm Bill Section 9006d d / b /f billwww.rurdev.usda.gov/rbs/farmbill
www.farmenergy.org• Renewable Energy & Energy Efficiency: gy gy y
wind solar biomassgeothermal hydrogen energy efficiency
• For farms, ranches, small businesses (not for residential t )systems)
• Grants (up to 25% of project cost), or Loan Guarantees (up to 50% of project cost)
• Grants to more than 375 projects in 36 states/year.• $38 Million available in 2008• Work with rural energy coordinators at your USDA State RuralWork with rural energy coordinators at your USDA State Rural
Development Office.• Simplified application for projects < $200,000.
Farm Bill: 9006 becoming 9007R l E f A i P (REAP)Rural Energy for America Program (REAP)
What’s New: E T h i l A i t t t• Energy Technical Assistance: grants to entities for energy audits/technical assistance; REAs among eligible entities Cooperative Ext ?REAs among eligible entities. Cooperative Ext.?
• Feasibility Studies – 25% match • Increases loan guarantee limits from $10• Increases loan guarantee limits from $10
million to $25 million; and from 50% to 75% of activities cost.activities cost.
• Small Hydro projects eligible• $55M in 2009 growing to $70M in 2012$55M in 2009 growing to $70M in 2012
Greenhouse Gas Reduction IncentivesColorado Carbon F nd GEO• Colorado Carbon Fund – GEO –www.ColoradoCarbonFund.org
Efficiency– Efficiency– Small Wind and Solar Projects– Methane Trapping/ReuseMethane Trapping/Reuse
• Western Regional Agricultural Offset Initiative - Colorado Climate Action PlanColorado Climate Action Plan– More efficient farming (No-till)
• Chicago Climate ExchangeChicago Climate Exchange (www.chicagoclimatex.com)
• Federal Legislation – e g Warner-LiebermanFederal Legislation e.g. Warner Lieberman– Incentive based approach for Agriculture
REAs Role for L l RE/EE D lLocal RE/EE Development
Services and Products for member-Services and Products for membercustomers– Energy Efficiency Assessments and Audits– Link to local banks and others for financing– Market for Renewable Energy (All
Requirements Contracts - Tri State’s Policy 115 5% local generation)115, 5% local generation)
– Distribution of equipmentI t ll ti & M i t– Installation & Maintenance
Fort Morgan State Bank and Morgan County REAMorgan County REA
“Green for Green Program”Green for Green Program
• Morgan County REAMorgan County REA• Fund loans for “Green Products” to
promote energy efficiencypromote energy efficiency• Energy Star Appliances, Insulation,
Wi d tWindows, etc.• 100% Loan, 5 or 10 year amortizations• Underwrite and prepare documents• Loan with Fort Morgan State BankLoan with Fort Morgan State Bank
Rocky Mountain Farmers Union Farm Scale Renewable Energy Development & Services
Financing -Local Banks-USDA Grants/Loans Revolving Loan Fund
$Farm-Scale Wind & Solar
RMFU – HomeGrown Power-Facilitate purchase/installation of renewable Farm-Scale
Renewable Energy/Energy Efficient Powered Farmers & Rural Businesses
-Revolving Loan Fund-RECs
Facilitate purchase/installation of renewable energy systems & energy efficiency technologies
-Aggregate projects
-Create Financing Tools
Farm-Scale Biodiesel“Clean Power
Cooperative”
Energy Effi iCreate Financing Tools
-Local Ownership models for Commercial Scale Projects
Efficiency Services
FUSA InsuranceTechnical Assistance -
Rural Electric Cooperativs (REAs)-Net Metering & Interconnection Standards
-Insurance ProductsAssistance -Commercial Scale Projects
g
-Installation and other services
-Energy Efficiency Audits
Commercial-Scale Projects• Outside Developers• Land Leases - Concerns, Questions, Q• Lack of Information
Opportunities:• Landowner Wind Associations• Community Wind (www.windustry.org)• CHEN Coop – Coop of Local Project• CHEN Coop – Coop of Local Project
Developers, Information Sharing (www harvestenergy org)(www.harvestenergy.org)
Scale of Large and Small Turbines Large Turbines (1-2+ MW)
• Typically installed in multi-MW windfarms
• Provide low cost bulk power • Provide low-cost bulk power
• US$1.7M per MW, US$2.5M for community-scale
• Require 6 m/s (13 mph) average wind speeds, 60 80 m towers60-80 m towers
Small Turbines (300 W - 300 kW)
I t ll d t id f iliti
91 ft 80 ft
• Installed at on-grid facilitiesor off-grid, matched to load
• US$3,000-7,000/kW installed
D i d f li bilit d • Designed for reliability and low maintenance
• Require 4 m/s (9 mph)average wind speeds
10 kW, 7 m rotor, 24 m tower
average wind speeds, 35-120 ft towers
1. Know your wind resourceor
What’s your area’sWhat s your area scapacity factor? Close to 40%?
New Mexico Wind Resource MapResource Map
Colorado Senate Bill 91 Task Force: Renewable Resource Generation Development pAreas Task Force
www colorado gov/energywww.colorado.gov/energy, Connecting Colorado’s Renewable Resources to the Markets, 2008
Wind Energy AreasWind Energy Areas
GDA = Generation Development Areas
2 H ill th i d t2. How will the wind energy get to market?to market?
Where is the market?
Transmission TransmissionTransmission, Transmission, Transmission
High Plains Express (HPX) Project
Initial Feasibility Studies•Initial Feasibility Studies–Synergies with other projects•Integrated AC System–Improved connections pbetween states/systems–Improved Reliability
•Two 345 or 500 kV lines•Two 345 or 500 kV lines•1,200 Miles•2,000 MW –3,000 MW•Significant renewable component•Power Imports/Exports•Stakeholder Process
•Project Participants–Xcel, Tri-State, WAPA, PRPA, CSU, PNM, SRP & Trans-Elect–WIA, NM RETA & CEDA?NM-RETA & CEDA?Note: This is only a conceptual route
3 Is there a long term market3. Is there a long term market for Wind Energy?gy
What are the drivers for futureWhat are the drivers for future development? p
DSIRE: www.dsireusa.org January 2008
People want renewable energy
Renewable Portfolio StandardsMN 25% b 2025 ME 30% b 2000
g y
MA: 4% by 2009 +1% annual increase
WI: requirement varies by utility; 10% by 2015 goal
MN: 25% by 2025(Xcel: 30% by 2020)
ME: 30% by 200010% by 2017 - new RE
RIMT: 15% by 2015
VT: RE meets load growth by 2012*WA: 15% by 2020 ☼ NH: 23.8% in 2025
OR: 25% by 2025 (large utilities)% 10% b 202 ( ll ili i )
ND: 10% by 2015
☼ PA: 18%¹ by 2020
☼ NJ: 22.5% by 2021
CT: 23% by 2020IA: 105 MW
CA: 20% by 2010
☼ *NV: 20% by 2015
RI: 16% by 2020
☼ CO: 20% by 2020 (IOUs)*10% by 2020 (co-ops & large munis)
☼ NY: 24% by 2013
IL: 25% by 2025
5% - 10% by 2025 (smaller utilities)
☼ PA: 18% by 2020
☼ AZ: 15% by 2025
CA: 20% by 2010
☼ DC: 11% by 2022
☼ MD: 9.5% in 2022
*VA: 12% by 2022
MO: 11% by 2020
☼ *DE: 20% by 2019
☼ NM: 20% by 2020 (IOUs)10% by 2020 (co-ops)
☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)
State Goal
TX: 5,880 MW by 2015State RPS
☼ Minimum solar or customer-sited RE requirement* i f i
HI: 20% by 2020
Solar water * Increased credit for solar or customer-sited RE
¹PA: 8% Tier I / 10% Tier II (includes non-renewables)heating eligible
4 How will wind development4. How will wind development impact your community? p y y
EconomicEconomicEnvironmental
Social
Wall Street Journal(Front page March 12, 2007)(emphasis added)
• “Wind developers in the U.S. have typically p yp yoffered landowners one-time signing payments of about $3 an acre and annual royalties totaling 3% of revenue. Within months in Briscoe, % ,energy companies were offering signing payments of between $50 and $80 an acre and royalty payments of about 6% annuallyroyalty payments of about 6% annually, according to Mr. Arnold and several other local landowners. If the Briscoe project is built, a local rancher could expect to collect some $80 000 arancher could expect to collect some $80,000 a year for each "section" of land, a parcel equal to 640 acres.”
Copyright 2008 Hackstaff Gessler
Wind energy land agreementsWind energy land agreementsThree forms
–Meteorological tower or ti tcooperation agreements
O ti–Options
E t l–Easements or leases
Copyright 2008 Hackstaff Gessler
Note regarding cooperation agreements and options (Concerns)• Cooperation agreementsCooperation agreements
– typically include first refusal concepts– likely include exclusivity conceptslikely include exclusivity concepts– may require execution of a lease
• OptionsOptions– include exclusivity concepts– require execution of a leaseq
• Consult with a lawyer before signing a wind agreement
Copyright 2008 Hackstaff Gessler
g
General wind easement /lease h t i ti (C )characteristics (Concerns)
• Long, complicated agreements - 25 to 100 pages
• Long terms– Option, or initial terms (with extensions) of four to 15 years– Lease terms (with extensions) of 35 to 99 years (and sometimes longer)
• Restrictive of landowner– Limit uses of land– Prohibit relationships with other developers
B d i ht i f f d l l t d t i d j t d l t• Broad rights in favor of developer related to wind project development, finance, and operation
– Grant various easements (access, energy production, noise, transmission, …)– Authorize expansive assignment and finance rights
A th i t ti d d l t f i j t f t– Authorize construction and development of various project features• Foundations, towers, and turbines• Roads• Substations and switching facilities• Transmission
Copyright 2008 Hackstaff Gessler
Transmission
Examples of lease economic packages(9)
DeveloperDeveloper Signing Signing bonusbonus
Option fee Option fee (also look for (also look for option option extension fee)extension fee)
Installation Installation feefee
RoyaltyRoyalty Minimum Minimum royaltyroyalty
Minimum Minimum royalty royalty escalatorescalator
Transmission Transmission feefee
Crop loss (and Crop loss (and note other note other fees such as fees such as for roads, for roads, substations )substations )substations…)substations…)
AA NoneNone $2.00 per acre, $2.00 per acre, annuallyannually
NoneNone 3%3% $3,000 MW $3,000 MW (instead of (instead of royalty)royalty)
NoneNone $1.00 per $1.00 per linear foot linear foot (one time)(one time)
Actual Actual damages, not damages, not to exceed $500 to exceed $500 per acreper acre
BB $5 000$5 000 $5 000$5 000 $5 000 per$5 000 per 4% (yrs 14% (yrs 1 15)15) $2 000 per$2 000 per NoneNone $1 50 per$1 50 per ActualActualBB $5,000$5,000 $5,000 $5,000 annually annually (irrespective of (irrespective of property size)property size)
$5,000 per $5,000 per machine machine (irrespective (irrespective of size)of size)
4% (yrs 14% (yrs 1--15)15)5% (yrs 165% (yrs 16--25)25)6% (yrs 266% (yrs 26--50)50)
$2,000 per $2,000 per WTG WTG (irrespective (irrespective of size)of size)
NoneNone $1.50 per $1.50 per linear foot linear foot (one(one--time)time)
Actual Actual damages, with damages, with no capno cap
CC NoneNone $2.75 per acre $2.75 per acre annuallyannually
$2,500 per $2,500 per MWMW
2% (yrs 12% (yrs 1--20)20)3% (after yr3% (after yr
$3,500 per $3,500 per MWMW
With With inflationinflation
$4,000 per $4,000 per mile (onemile (one--
Actual Actual damages, with damages, with yy 3% (after yr 3% (after yr
20)20)((
time)time)g ,g ,
no capno cap
DD $2,500$2,500 $2.00 per acre $2.00 per acre annuallyannually
NoneNone 3% (yrs 13% (yrs 1--20)20)4% (yrs 214% (yrs 21--30)30)5% (yrs 30 and 5% (yrs 30 and beyond)beyond)
$3,000 per $3,000 per MWMW
With With InflationInflation
NoneNone $350 per acre$350 per acre
EE 10% of 10% of OptionOptionFeeFee
$5.00 per acre $5.00 per acre annuallyannually
$2,000 per $2,000 per MWMW
4.5% (with 4.5% (with inflation factor)inflation factor)
NoneNone NoneNone $1.00 per $1.00 per linear foot linear foot (one(one--time)time)
NoneNone
FF NoneNone $1.60 per acre $1.60 per acre annuallyannually
NoneNone 3%3% $3,200 per $3,200 per WTG WTG
NoneNone NoneNone ActualActual
Copyright 2008 Hackstaff Gessler
yy(irrespective (irrespective of size)of size)
The per-MW difference between a 3%, 4%, 5%, and 6% royalty
(Based on per-MW gross revenue of $120,000.00 (fixed, for purposes of this discussion), with no escalation)), )
• Annual– 3% = $3,600 per-MW3% $3,600 per MW– 4% = $4,800 per-MW– 5% = $6,000 per-MW
6% = $7 200 per MW– 6% = $7,200 per-MW
• Over 40 years– 3% = $144 000 per-MW3% = $144,000 per MW– 4% = $192,000 per-MW– 5% = $240,000 per-MW
6% $288 000 MWCopyright 2008 Hackstaff Gessler
– 6% = $288,000 per-MW
Ensuring the best dealEnsuring the best deal
• Provide more than just land (e.g. wind data, j ( g ,arrangements for other land)
• Organize as a group• Limit and/or condition the option term
– Projects take considerable time, meaning landowners want out of relationships with developers notwant out of relationships with developers not advancing the project
• Confirm the developer is suited to develop the project– Partnering with the wrong developer may result in a
delayed or missed opportunity
Copyright 2008 Hackstaff Gessler
delayed or missed opportunity
Local Ownership/Community Wi d M d l
• Minnesota farmer cooperative
Wind ModelsMinnesota farmer cooperative (Minwind)
• “FLIP” structure • Local Equity in Projects
www.windustry.org(Web site with resources for developing farmer owned
wind projects and negotiating contracts)
A new approachA new approach…
Landowner Wind Associations
Tony Frank Cooperative Development CenterRock Mo ntain Farmers UnionRocky Mountain Farmers [email protected]
fwww.rmfu.org
Landowner Wind Associations
By:Grant Stumbough, Southeastern Wyoming RC&D Coordinatorg y g
Gregor Goertz, Chairman of the Slater Wind Energy Association, LLC
Tony Frank, Director of Renewable Energy Development, Rocky Mountain y gy p yFarmers Union
What is a Landowner Wind Association (LWA)?Association (LWA)?
Local Landowners - MembershipLocal Landowners MembershipLLC for set period of timeSet boundaries based on Wind ResourceSet boundaries based on Wind ResourceOperating Agreement/RFP ProcessSeek Technical and Legal Expertise“Market” the Resourcea e e esou ceSeek Local Government SupportCollective Bargaining with DevelopersCollective Bargaining with Developers
Wyoming LWAsy g
Spring of 2007 began formingp g g g8 LWAs today with approximately (3 more forming soon), 900,000 acresforming soon), 900,000 acresCapacity Factor of 40-46%S th t W iSoutheast WyomingTransmission constraints for any future development2 LWAs agreements with Developersg
Wyoming LWAs
New Mexico LWAsNew Mexico LWAs
Spring of 2008 began formingSpring of 2008 began forming
15 Landowner Wind Associations –1 000 0001,000,000 acres
Northeast New MexicoNortheast New Mexico
New Mexico LWAs
Colorado Community Wind LLCs &LWAsLWAs
3 Community Wind Landowner LLCs formed in y2004
2 in agreements with developers; continue to seek community wind projectscommunity wind projects1 Received $1.7 million in USDA 9006 grants; 1 selected for 69 MW Xcel Project (Projects not
)developed)Landowner Transmission Corridor being pursued
1 LWA formed in Summer 20081 LWA formed in Summer 2008Transmission Constraints (Baca County, GDA #5))
Colorado Community Wind LLCs/LWAsLLCs/LWAs
High Plains Express (HPX) Project
Initial Feasibility Studies•Initial Feasibility Studies–Synergies with other projects•Integrated AC System–Improved connections pbetween states/systems–Improved Reliability
•Two 345 or 500 kV lines•Two 345 or 500 kV lines•1,200 Miles•2,000 MW –3,000 MW•Significant renewable component•Power Imports/Exports•Stakeholder Process
•Project Participants–Xcel, Tri-State, WAPA, PRPA, CSU, PNM, SRP & Trans-Elect–WIA, NM RETA & CEDA?NM-RETA & CEDA?Note: This is only a conceptual route
Transmission Policy• Renewable Energy Zones• Renewable Energy Transmission CorridorsRenewable Energy Transmission Corridors• Renewable Energy Transmission Authorities• Investment Tax Credit for TransmissionInvestment Tax Credit for Transmission• Transmission Line Tax Credit for Landowners• Royalty Compensation Models for Transmission• Royalty Compensation Models for Transmission
Lines• USDA’s Rural Utility Service – RenewableUSDA s Rural Utility Service Renewable
Transmission Role• Distribution System StudiesDistribution System Studies
Slater Wind Energy Association,Slater Wind Energy Association, LLC
A Wyoming Wind StoryA Wyoming Wind Story
Why Form a Wind Association? y
L d C With Wi d LLandowner Concerns With Wind Leases:Lack of trust with wind developersDevelopers were perceived as “wind speculators”Developers were perceived as wind speculatorsNon disclosure clausesPitting neighbor against neighborBeing picked off one at a timeBeing picked off one at a timeCheckerboard wind lease patterns began to appearLack of information and knowledgeLack of control Loss of private property rightsUNLEVEL PLAYING FIELD U G
Step 1: Determine Interest in Forming an AssociationForming an Association
A small group of Landowners requested helpg p q pThey demonstrated:
InterestLeadershipLeadershipCommitment
Recognized the benefits of forming an Association:St th i bStrength in numbersCollective bargainingBlock up lands to enhance their ability to market wind resourcesresourcesOpportunity to become informed about wind energyEverybody gets a “piece of the pie” A id di id d itiAvoid divided communities
Step 2: Delineate Potential BoundariesBoundaries
Landowners sat down and drewLandowners sat down and drew boundaries on a map
Area consisted of 28 000 acres and 45Area consisted of 28,000 acres and 45 landownersDeveloped a contact listDeveloped a contact list One on one visits Called absentee landownersCalled absentee landownersBegan fostering landowner interest within those boundariesthose boundaries
Step 3: Hold First Meetingp g
Invited all potential Association membersInvited all potential Association membersInvited technical, legal, and financial expertiseProvided ample opportunity for landowners toProvided ample opportunity for landowners to ask questions and provide input
Facilitator is importantpVoted on whether to form an AssociationFormed a Steering CommitteeFormed a Steering Committee
Provide guidance in determining next steps
Step 4: Evaluate Wind Energy Development PotentialDevelopment Potential
Five Major ComponentsFive Major Components1. Wind Energy Resources2 Transmission access and capacity2. Transmission access and capacity3. Market for wind energy
Environmental Impacts and Other4. Environmental Impacts and Other Location Factors
5 Landowner and Community Support5. Landowner and Community Support
Wind Energy Resourcesgy
The Slater Area has some of the best wind energy in the world – NREL40% to 46% wind capacity factor18 to 24 MPH average wind speedCapable of producing 500 MW or moreAdditional anemometers and Met towers are needed – collect as much data as possibleIn some areas the wind is “too good” Class 7In some areas the wind is too good – Class 7Developers have identified this area as prime for wind energy developmentfor wind energy development
Transmission Access and Capacity
Wyoming-Colorado Intertie Transmission y gProject (TOT 3)
First Phase – WAPA, TransElect, WIAD t Wh tl d 75% i dDenver to Wheatland – 75% windDouble 345 KV lines with 900 MW capacity2013 Online date
Second PhaseWheatland to Dave Johnson Power PlantPurpose of the line is to tap coal power2015 completion date
Open Season scheduled for early 08Considerable interest in purchasing capacity in the lineConsiderable interest in purchasing capacity in the line
Transmission (Continued)( )
DRAFT**New Transmission Projects in Wyoming**DRAFT
Project by Trans-Elect, WIA & WAPA
DJ/LRS to PawneeWyoming-Colorado Intertie 2013 900 Colorado Front Range
j y g
Project In-Service Date Capacity (MW) Intended Markets Estimated Start & End Points
Projects relative to the Interim Agreement made up of APS, PacifiCorp, National Grid & WIA
Gateway South 2013 3,000Native Load Growth in
Utah and Nevada DJ area to Crystal
DJ t Ph iT W t E 2015 3 000 D t S th tProject by PacifiCorp& Idaho Power
Bridger to Oregon Gateway West 2012 3,000
Native Load Growth in Idaho & Pacific
Northwest
DJ area to PhoenixTransWest Express 2015 3,000 Desert Southwest
Project by CSU, PRPA, PNM, SRP, Trans-Elect, Tri-State, WAPA, Xcel, WIA & RETA
TOTAL 12 900
High Plains Express 2017 3,000Colorado, New Mexico
& Arizona
N/W Wyoming to Phoenix via Colorado Front Range & New
Mexico
TOTAL 12,900
Market for Wind Energygy
Numerous states (30) have passed ( ) pRenewable Portfolio (RPSs) Standard Legislation
Example - Colorado – 16.1% of energy must comeExample Colorado 16.1% of energy must come from renewable sources by 2020
Production Tax Credits - 1.9 cents per KwCarbon CreditsCarbon CreditsGreen TagsHas created interest among developersHas created interest among developers, investors, and utility companies!Backlog of requests for large turbines
Environmental Impacts and Other Location FactorsLocation Factors
Avoid Migratory Bird Corridorsg yMust consider the Endangered Species ActArcheological studies or EISs may have to be conducted on public landsconducted on public landsCounty wind energy siting regulationsTopographyRoadsMicrowave towersAirports and flight pathsAirports and flight pathsGeological conditionsState tax structures
Landowner and Community Support
Concerns:Ch i L dChange in Landscapes Impact on viewshedsSurface damageProduction lossoduc o ossLoss of Wildlife habitatIncreased traffic, additional housing, more schools, increased sewage, etc.
PositivesPositives100 MW will contribute $500K to $1 million per year in county revenues100-200 jobs per 100 MW during construction2 6 t O&M j b 50 100 MW2-6 permanent O&M jobs per 50-100 MWFarming and ranching operation can continueAg diversificationGood for the environmentGood o t e e o e t
Step 5: Provide Information and EducationEducation
Invited TOT 3 Representatives to speakMet with the Wyoming Infrastructure AuthorityInvited former Governor Jim Geringer to visit about vertical axis turbinesMet with the County PlannerMet with the Wyoming Game and Fish DepartmentHosted tours of nearby wind farmsHosted tours of nearby wind farmsMet with numerous wind developersWorked with the Wyoming Business CouncilAtt d d W i Wi d W ki G tiAttended Wyoming Wind Working Group meetingsLandowners attended SE RC&D CouncilIncluded the Conservation District and NRCS
Step 6: Form an Association,LLC
Held meeting with landowners – 90% original g gsignup –Currently 98% signupOperating agreement:
GOAL=Utilize collective bargaining strategies toGOAL=Utilize collective bargaining strategies to solicit and market wind energy resourcesShort and simplePro ides for a 5 member Board of ManagersProvides for a 5 member Board of ManagersDuration is for 2 yearsAssesses a $.10 per acre membership feeLimited liabilityUpon completion of negotiations, landowners then have the option to sign individual lease agreementsp g g
Filed with the Secretary of State’s Office
Step 7: Developed a Request For Proposal (RFP)Proposal (RFP)
Positions the landowners to be “price makers” d t “ i t k ”and not “price takers”
Forces the wind developers to competeRequests the developers to submit a bidRequests the developers to submit a bidWeeded out the “land grabbers”
OBJECTIVE of the RFP is to create a:OBJECTIVE of the RFP is to create a:Marketing plan
Wind data, WCI info, sales tax exemption, etc.F ibilit St dFeasibility Study
Wildlife assessment, road network, excellent topography, etc.
B i Pl Wh t i t d b l dBusiness Plan – What is expected by landownersSigning bonuses
Step 7: Developed a Request For Proposal (RFP)Proposal (RFP)
Business plan (continued)L d l fLand lease feesPayment for easements for roads and connection linesRoyalty PaymentsPercent of carbon credits, green tags, and other environmental e ce o ca bo c ed s, g ee ags, a d o e e o e aincentivesConstruction Payment (One time fee) per MW One time payment for structures and building on the landSurface damage and production loss paymentsSurface damage and production loss payments
OtherPlans for site restorationPlans for trash removalPlans for trash removalInvasive weed controlInsurance and bonding requirementsDo you have a POWER PURCHASE AGREEMENT!!!y
Step 8: Negotiations
18 RFP Responses8 Proposals8 ProposalsEXAMPLE OFFERS:
Initial Development Phase – $7 dollars per acreConstruction Phase - $4,500 per MW, plus fees for Roads, buildings, and connection linesOperational Phase -Each 640 acres within the project area with 2 turbines would receive a minimum of $39 000 perwith 2 turbines would receive a minimum of $39,000 per year Each 320 acres within the project area (without turbines) would receive a minimum of $6 000 per yearwould receive a minimum of $6,000 per year
Currently in Final Negotiations With a Developer
Role of RC&D Councils in Wind Energy DevelopmentEnergy Development
Facilitate the processFacilitate the processAssist with project planning, organizing, and coordinating Not a decision makerBring the right people together to “make it happen”E l l lEmpower local peopleBe neutralProvide local people with the proper information soProvide local people with the proper information so they can make better decisionsMost of all build trust and a team!!!!
SUMMARY
Southeastern Wyoming must harnessSoutheastern Wyoming must harness and capitalize on it’s valuable wind resource in ways that make technicalresource in ways that make technical, economical, environmental and community sensecommunity sense.
Contact Information
Grant Stumbough, Southeastern Wyoming RC&D Coordinator 307 322Wyoming RC&D Coordinator – 307-322-2187
Gregor Goertz, Chairman of the Slater Wind Energy Assocation, LLC – 307-422-3445
