LIVINGSTON – A Minnesota company is proposing to erect about 25 big wind turbines somewhere between here and Springdale.
The project is still in its early phases, but Outland Renewable Energy is negotiating with landowners and potential investors here, according to Pat Pelstring of Wind Energy Developers, which is working for Outland.
In its initial stages, the 2.5-megawatt turbines, each about 400 feet tall, would be built on 4 or 5 square miles of land. One megawatt can provide power for up to 1,000 homes.
Pelstring would not specify where the mills would go because no deals have been finalized.
A new Montana company called Central Montana Renewable Energy has been formed, and Outland said in a press release that it has invested $120,000 in it.
If the project goes ahead, that company would develop it.
It’s also possible that in coming years the company would erect turbines in Park, Gallatin, Meagher and Sweet Grass counties that would generate up to 230 megawatts of power, Outland said.
Outland is building a $75 million, 50-megawatt plant in Cottonwood County, Minn., and has four other plants in various stages of development.
Outland, formed by five Minnesota farmers, uses a business model similar to the one used by Midwestern farmers to build ethanol plants.
Outland and local investors provide the seed capital – about $900,000 – which allows for engineering, contracting, environmental analysis, permitting and other technical “upfront” duties.
Then the project is sold to a large equity investor, which agrees to provide construction financing, Pelstring said.
That investor then reaps most of the returns from the sale of electricity, plus the valuable federal tax credits offered for renewable energy.
However, the investor also agrees upfront to cede the company back to the original investors at a predetermined time.
Under this model, most of the long-term profits from the wind farm are returned to local owners, Pelstring said.
“It’s a very different approach,” he said. “It’s much the same as the ethanol industry has done in the Midwest.”
The project faces some large hurdles if it moves ahead.
Montana already exports half of the electricity it produces, and there is a scarcity of transmission lines in the state.
NorthWestern Energy spokeswoman Claudia Rapkoch said Wednesday her company is examining ways to increase transmission capacity but is not in the market for more wind energy right now.
That could change in the future, she said.
Gov. Brian Schweitzer recently announced that a Canadian company plans to build a giant DC electric line stretching from Eastern Montana to Las Vegas and California. But that project is a few years away if it happens.
Plus, there is a long waiting list at factories that make wind turbines.
“That will continue to be a problem,” Pelstring said. But Outland said he has good contacts in the industry that could expedite deliveries.
Park County and the city of Livingston also have discussed pursuing wind energy development, though on a smaller scale and with the help of federal grants.
Park County commissioners familiar with the project could not be reached for comment Wednesday.
By Scott McMillion Chronicle Staff Writer
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