Wind and the wilds: release of proposed wind energy plant's financial data raises new questions about its environmental options 

Backers of a proposal to construct Virginia’s first wind energy plant, a high-risk, high-dollar venture pegged for an Allegheny Mountain peak, were promised confidentiality surrounding their eventual profit once the equipment is paid for.

But a moment’s confusion in late August led to a State Corporation Commission document clerk’s revealing an environmental organization’s analysis of confidential revenue, expense and profit forecasts submitted by the project’s developer, Highland New Wind Development LLC.

The mistakenly released analysis says the company expects to earn more than $4 million a year after paying off equipment and other startup costs. As is typical for the nascent wind-energy industry, the owners would be able to not only sell the electricity the turbines would produce, but also would make money from government incentives for renewable-energy investors, which include income tax breaks and marketable credits.

Critics say the figures show that Highland New Wind Development could easily afford bird, bat and other wildlife-protection measures costing up to several hundred thousand dollars that the company has so far deemed too expensive. Those same critics are asking whether the company, founded as a provider of green, renewable energy, is really environmentally conscious enough.

Highland New Wind Development, also known as HNWD, is seeking certification from the SCC to build a $60 million, 19-turbine project in Highland County. The company isn’t confirming or denying whether the mistakenly released figures are genuine. But its lawyer, John Flora, says the company rejects the conclusion that the company can afford extensive animal protection measures, arguing that environmentalists and other critics aren’t qualified to make judgments on that issue.

“That would be The Nature Conservancy’s financial analysis,” Flora said. “I wouldn’t call The Nature Conservancy for financial analysis. They’re a conservation charity. They’re not financial analysts or energy experts.”

The SCC has already found the project will provide economic benefits and not disrupt electrical service or competition, conditions that must be present for final approval. Now it is considering which wildlife-related measures to require for the safety of bird and bat populations in particular and what share of the company’s costs, if any, should be paid by taxpayers or environmental groups. A preliminary decision could be issued any day.

Outside the SCC proceedings, the disclosure of the project’s moneymaking potential in August has energized the public debate, and critics are casting an ever-more skeptical eye toward Henry McBride, the retired Harrisonburg turkey farmer and agribusinessman behind the project, and his vision for placing wind turbines up to 400 feet tall on a small area of Red Oak Knob and Tamarack Ridge visible from U.S. 250.

“The amount of profit that was forecast was very surprising in light of the fact that the proponents of the project had told the State Corporation Commission that they couldn’t afford to do the environmental studies that they were being requested to do by people like The Nature Conservancy,” Highland County resident and project opponent Chris Little said. “The reasons they’ve given clearly can’t be the reasons why they don’t want to do them.”

McBride, 80, didn’t respond to phone messages left for him by a reporter on Wednesday and Thursday.

But his spokesman, Frank Maisano, said McBride hopes to advance state clean-energy objectives and reduce reliance on oil and gas by constructing Virginia’s first wind farm, which is envisioned as an emission-free source of up to 39 megawatts of electricity capable of powering thousands of homes. The project, which would take nine months to build, is on track to begin operation in summer 2009 if certified by the SCC and not held up by lengthy court appeals, Maisano said. McBride has earmarked 200 acres of cow pasture out of 4,000 acres the McBride family owns for the project.

“He’s trying to figure out a way he can help the community, help the state with renewable power and help the environment,” Maisano said. McBride, isn’t primarily interested in making money, Maisano said. He is interested in making enough to pay the costs of preserving the family property for his children and grandchildren, said Tal McBride, his son and an Arlington, Va., businessman. He declined to comment on the project’s finances.

In a mistaken posting on the SCC’s Web site, a clerk breached a cloak of secrecy that had allowed the agency’s regulators and various lawyers to evaluate HNWD’s business plan and financial forecast in private. Officials had closed parts of hearings and redacted portions of legal briefs where such matters were discussed, affording protection that is routine at the SCC for applicants’ trade secrets, financial data and other proprietary facts.

But then Wiley Mitchell, an attorney for The Nature Conservancy of Virginia, argued in a brief that HNWD would have plenty of money to fund wildlife measures it was resisting. He quoted some of the company’s confidential financial projections he had been authorized to view but not disclose publicly. He sent SCC regulators his brief along with a second, shortened version with money references taken out for purposes of posting on the document page for the wind project. Mitchell, who called the disclosure accidental, labeled the brief with the confidential figures as “public.”

A clerk posted the document on the SCC’s Web site and later replaced it with the shortened version when the error was caught. The confidential version was public for only a short time, but at least one person downloaded the document. Details were printed in the newspaper of record in Highland County, The Recorder in Monterey, which has closely followed the wind farm case. A copy was also obtained by The Roanoke Times.

According to the confidential figures that were released, HNWD will take in about $9 million a year. After expensing its major debts, which could take 10 to 15 years, “the net cash from operations, after payment of all expenses, is $4,248,749 per year,” the document said. Wildlife measures backed by The Nature Conservancy and other groups, carry an estimated price tag of $150,000 a year during the first three years and less afterward, but potentially millions over the life of the project.

“By any rational standard, the cost of identifying and rectifying the environmental damages this project will cause is both reasonable and affordable – and should not jeopardize its financial viability,” Mitchell said.

Maisano said HNWD is willing to pay its fair share to protect wildlife and the environment and have its facility used for studies, experiments and analysis to guide future wind-energy projects likely to materialize in Virginia.

But investors won’t underwrite extraordinary wildlife measures that go beyond the norm or accept severe operating restrictions, company officials said.

Little said he now questions whether the company opposes stringent wildlife studies sought by state biologists and environmental groups because of their cost, as the company has said, or, as Little believes, because those studies would document unacceptable levels of animal risk.

“If objective, reasonable studies are done, it will demonstrate that this is the wrong place for these wind turbines,” Little said.

By Jeff Sturgeon

The Roanoke Times

5 October 2007