In this issue
		Energy Services Bulletin home page
		Innovative ownership makes wind farm a good neighbor
		Arizona co-op cleans up with fly ash sales
		California utilities test peak-shifting cooling technology
		BPU helps Kansas City's biotech industry grow
		Updated cooling rebate program targets commercial customers
		Air Force leads Federal agencies in green power purchases
		Resort area utilities grapple with price of popularity
		Energy organizations make plan to encourage efficiency
		EPTC wind farm simulator answers interconnection questions
		Seminar prepares public utilities for Colorado RPS
		Topics from the Power Line: Select the right heat pump for residential heating and cooling
		Energy shorts
		Technology Spotlight: The rising cost of steam
		Calendar of events

Innovative ownership makes wind farm a good neighbor

Sun sets over the Trimont Area Wind Farm. With 67 towers located on 8,500 acres, the facility is the largest landowner-developed, commercial-scale wind project in the country. (Photo by PPM Energy)

The benefits of wind development to small towns and rural areas include a steady income for landowners who lease their property, increased property tax base, jobs and healthy home cooking—at least, that's what the Trimont Area Wind Farm did for its southwestern Minnesota community.

Shortly after the 100-MW wind farm went online in December, its operator PPM Energy and customer Great River Energy donated $2,000 to help a volunteer-run restaurant buy the building it occupies. The Chocolate Moose Café, run by the Trimont Chocolate Festival committee, was a favorite lunch spot for construction workers building the wind farm.

Pulling together for local business

"Supporting the local economy is good for all of us," said PPM Energy Communications Director Jan Johnson. "Besides, both the food and the sense of community at the Chocolate Moose are treasures."

"Great River Energy strives to be a strong community partner for economic development," said Great River Business Developer Tom Lambrecht. "Assisting the Chocolate Moose was a way to provide stability for a valuable resource to the Trimont area."

City officials were trying to keep local businesses afloat when they offered the empty restaurant space to the festival committee rent-free. Volunteers cleaned and decorated the old building, and a few paid employees and regularly scheduled volunteers now serve pancakes, pie and rib sandwiches to Trimont residents. The two-room restaurant also provides space for local meetings and family celebrations and catering service upon request.

Revenues from the café support Trimont's two-year-old Chocolate Festival. "It's an incredible event," said Johnson. "Last year, Garrison Keillor did a show from the festival and stayed afterward to sign autographs, in spite of the mosquitoes."Keillor was presented with a Trimont Area Wind Farm cap.”

Grassroots spirit behind wind farm

The community spirit that rallied behind the Chocolate Moose also built the nation’s first landowner-developed, commercial-scale wind project. When Great River Energy issued a request for proposals to develop 100 MW of wind power in 2003, a group of local citizens from Jackson and Martin counties responded.

A few farm families who owned several thousand acres near a Great River Energy generating station wanted to build their own wind farm instead of waiting for a company to develop the area and reap the profit. The group obtained agreements from about 40 landowners for the wind project, raised seed money, tested the wind and got permits.

That hard work paid off when the landowners who formed Trimont Area Wind Farm LLC beat out 55 companies to win the Great River Energy contract. Their properties' proximity to Great River Energy's transmission lines helped the proposal. So did the fact that the landowners were customers of South Central Electric Association, a Great River member co-op.

"Working with a local partnership group is something that Great River Energy really enjoys," said Lambrecht. "This project will return numerous benefits to our members both financially and by meeting our alternative energy production goals using a local resource."

Partnership improves individual return

Once Trimont received the contract, members had a decision to make. "Our aspiration was to own the wind farm ourselves, but that came up against the reality of funding constraints," said Earl Cummings, president of TurningPoint Management, Inc.

Any form of leveraged debt would make it difficult to offer the wind farm's output at a competitive price, Cummings explained. "We decided that the project had to stand on its own—no grants or assistance other than the production tax credit," he said. "From our point of view, working with PPM gave us a similar rate of return to self-ownership, with a lot less risk."

So Trimont researched developers and approached Portland, Ore.-based PPM. "There were about six options, but PPM had the right kind of experience, and they were bullish on renewable energy," recalled Cummings.

PPM agreed to buy, build and operate the Trimont facility—67 towers on more than 8,500 acres with 100-megawatt total capacity. "From an interconnection and marketing standpoint, the project was ideal," said Raimund Grube, vice president of PPM WindPower. "It gave us a customer relationship with Great River Energy, which is really important in the Midwest, and the opportunity to enter into a community-based deal structure was intriguing."

The landowners get individual lease payments totaling between $350,000 and $400,000 per year. In addition, they will receive a share of the gross revenues received from the sale of energy from the project. "That's a percentage of the gross revenues that is not subject to PPM costs," explained Grube.

PPM receives the production tax credit and passes that savings on to Great River Energy.

Model for rural development

During construction, the project employed between 50 and 190 construction workers who supported the Chocolate Moose, among other Trimont businesses. The wind farm also created six full-time permanent jobs once it began generating in November 2005.

Meanwhile, the farms continue to produce crops as well as clean electricity that brings Great River Energy's renewable generation to 5 percent—halfway to its goal of 10 percent by 2015.

The TAWF business model may spread beyond a couple of southwestern Minnesota counties. Grube presented the case study to a member forum of the American Wind Energy Association in February. "We got a lot of questions," he said. "The industry is seeing more landowner-initiated development, and they know they can't ignore it."

Cummings, whose first experience with wind development was the Trimont project, is now putting together similar deals for other rural communities. "The business model is ahead of its time in the way it improves the risk/return formula for individual owners," he said.

The project has been a great example of the role renewable energy can play in rural development. The infusion of revenue has helped Trimont's business community, as the Chocolate Moose Café's diners and operators would agree.

Lambrecht observed that the wind farm has shown that local residents can make a real difference in how electricity is generated, "and our customer members get the benefit of clean, affordable energy."

The TAWF landowners certainly welcome the lease payments and revenue shares, but their satisfaction goes deeper. "One LLC member told me that it warms her heart to leave a legacy of farmers helping to develop renewable energy," Cummings said.