While President Bush has suggested using more renewable energy and Minnesota lawmakers seek to press utility companies toward that goal by 2020, a task force of metro counties is wrestling with whether members can meet that challenge on their own.
Anoka, Dakota, Hennepin, Ramsey and Washington counties are among 22 counties weighing a plan to harness one of the cleanest forms of alternative energy and draw power from the wind.
Nervous about rising energy prices, the Metropolitan Counties Energy Task Force proposes building about 170 wind turbines in southern Minnesota. The 120- to 150-megawatt project would cut the cost of powering county buildings across the metro.
“To my knowledge, nobody’s ever done this before,” said Dakota County Commissioner Tom Egan, one of the wind initiative’s leading proponents.
But even some task force members worry those plans may be too grand.
Some county leaders say they’re uncertain about whether they’ll draw enough major investors or how much money counties would have to contribute to get the project off the ground. And when and if they do, who will run the operation?
“I don’t think it’s my role to put the “¦ taxpayers at risk,” said Sherburne County Commissioner Felix Schmiesing, who admits to being skeptical. “We don’t want to become a utility.”
The task force, made up of the seven metro counties and the Metropolitan Council, partnered last year with the Rural Energy Board, a group of 17 wind-rich counties in southern Minnesota that are either already home to wind farms or are eager to draw new jobs and industry.
Together, the two associations have talked about generating a steady supply of clean, affordable electricity. The Counties Wind Initiative seeks to disperse the new turbines among the southern counties, so that each site will likely host small wind farms of 10 or fewer turbines.
The goal is to lock in cheap electricity rates with long-term contracts, while keeping production locally owned. Out-of-state interests own about 70 percent of Minnesota’s developed wind power, so profits zip elsewhere.
While the price of wind energy is expected to remain relatively flat, that doesn’t hold true for coal, oil and natural gas.
Tony Hainault, an energy analyst for Hennepin County, said metro counties spend $15 million annually on electricity for county facilities.
“The projections I’ve been shown show a steady increase in energy costs, every year for the foreseeable future,” said Jay Trusty, executive director of the Southwest Regional Development Commission, which staffs the Rural Energy Board.
“The question comes up, if this project is so good, why hasn’t the private sector done this? The answer is these projects are so small, there isn’t the sufficient critical mass that the private sector would need to justify an investment,” Egan said.
But with the counties as a guaranteed customer base, a federal tax credit could draw local investors to back the project and cover all or much of the development costs. With the construction of a 1-megawatt turbine costing about $1 million, the combined price tag for the farms is likely to exceed $100 million.
“We counties clearly cannot be the owners,” Egan said. “We have to find people who are willing to invest in this.”
So who will run 170 wind turbines and make sure the member counties get their share of energy?
The partnership hired the law firm of Lindquist and Vennum, along with Avant Energy Services, to develop a business concept and two options for governing the enterprise.
The first model would be to administer the wind farm through a joint operating agreement among the counties. A more likely scenario, say officials, is to create a new Renewable Energy Agency, akin to a municipal power company, to broker contracts with utility companies directly.
The Rural Energy Board approved a request to the Legislature on Jan. 29, and the task force voted Feb. 1 to recommend the agency model to the individual counties. But neither model has been officially adopted by the partnership.
Most counties probably won’t make a decision on whether to participate in the wind initiative before 2008, when the partnership is expected to issue a formal development plan.
The wind initiative has been funded to date by a $20,000 grant from the Department of Commerce, $20,000 from the task force counties and $20,000 from the Rural Energy Board. Most of that has been used to hire consultants.
In addition, the Department of Commerce is likely to offer a $200,000 grant to refine and initiate the project, with an additional $35,000 possible from the Pollution Control Agency, Egan said.
But counties choosing to participate will be expected to chip in for organizational costs, including technical and legal expertise to implement the business plan, and that factor, along with other unknown price tags, has made some members nervous.
“As someone that’s watched this evolve, I’m very interested in it,” said Gary Kriesel, chairman of the Washington County Board of Commissioners. “But having said that, it will be up to the counties whether they think the risk or the mission is worth it. I certainly think it’s doable.”
BY Frederick Melo
1 March 2007
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