Farmers, ranchers eye action in wind
CASPER — Some Iowa farmers have decided the best way to capitalize on wind is to own turbines churning out the electricity.
Ed Woolsey, who heads Green Prairie Energy in Prole, Iowa, is part of a group that owns 10 turbines in north-central Iowa producing enough wind for about 7,500 homes a year.
“The idea was to get some locally owned projects out there to keep more money in communities,” he said. “All wind energy is good, but some is much better than others.”
Small wind projects can take advantage of various incentives, including U.S. Department of Agriculture grants and a production tax credit from the state.
Woolsey said about 40 megawatts of production across the state is locally owned, of more than 3,000 megawatts of total wind operating capacity. A megawatt is a unit of power equal to 1 million watts.
Local wind groups strive to stay below a definition for small wind farms of 20 megawatts or less to avoid more detailed transmission studies.
“The holdup now is transmission’s starting to fill up with very large projects,” Woolsey said. As a result, small developers hope to use smaller distribution lines rather than the big transmission lines.
“By doing that, we fill up those lines from the bottom up. Fill them up locally,” Woolsey said.
There also is controversy about how much a project should pay to use lines. Since many lines have been paid off, charging for new generation is viewed as problematic.
Groups like Woolsey’s often concentrate on debt service first, so after about 10 years, they are able to sell electricity at a cheap rate.
“By doing it that way, we really guarantee a rate stabilizing effect for the customer and the company for a long time into the future,” Woolsey said.
Even so, Iowa farmers are more apt to take a land-lease fee typically of about $5,000 per year for each turbine and leave the operations to power companies.
“To educate farmers and small business people to take advantage of some of these opportunities and to fight for a piece of the action is an uphill battle,” Woolsey said, even though in the long run, ownership would be more lucrative.
Wyoming’s wind energy industry does not compare in size to Iowa’s, but it is expanding rapidly. Last summer, the state was among the leaders in adding new generation capacity.
Ranchers have been asking questions that by now are familiar to Iowa farmers. But Grant Stumbough, southeastern Wyoming RC&D coordinator, said local landowners are coming up with different answers.
Wind farm ownership among ranchers has not gained traction in the state because of inherent risks and high costs, he said. In Iowa, a main electricity load center may only be 20 miles away. “We’ve got to take this stuff clear to Las Vegas,” Stumbough said.
Wyoming’s transmission system also isn’t as well developed as Iowa’s. Building big lines will take lots of money, and that won’t come from farmers and ranchers, he said. So local groups have focused on lease payments, construction payments and royalty payments.
Stumbough said it works something like this: A rancher might receive a temporary payment of $3 or $4 per acre for leasing land, and a one-time construction payment of $3,000 to $5,000, depending on wind turbine size.
Then a royalty payment based on gross revenue will increase for 3 percent in the first year to perhaps 8 percent over time, as the turbine is paid off. That could yield annual payments to ranchers of between $9,000 and $17,000 per turbine.
Woolsey said if small businesses and entrepreneurs want to be in the game, they need to begin with favorable legislation.
“It only takes a few,” he said. “It’s amazing how few people it takes to get something done at the Capitol if they’re determined.”
And the stakes for rural communities are high, Woolsey said. “The wind rights are probably more valuable than the natural gas rights in Oklahoma. Our wind likely will never cease.”
By TOM MAST Casper Star-Tribune
5 December 2009
Tags: Wind power, Wind energy
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