The Oberlin City Council has pulled the plug on talks with a start-up wind company that wanted to produce its power in the community’s backyard.
Despite that move, Sunflower Wind has no intention of backing away from its efforts to establish a wind farm in Decatur County, which is where the electricity would come from.
The Oberlin City Council and Sunflower Wind have been in discussions – for several months now – concerning the sale and delivery of electricity to the community.
The hangup, however, has been the language in the proposed contract that Sunflower has urged the city council to sign.
The contract initially contained a right-of-first-refusal clause that some say could have given Sunflower an upper hand in its effort to sell power to Oberlin.
Contract language was revised somewhat, to contain a “reverse bidding process.”
That effectively meant Sunflower would have been allowed to negotiate a lower price if bids came in below 9 cents a kilowatt hour.
At a meeting in September, Oberlin’s consultant bristled at the notion of a right of first refusal in the contract. He didn’t embrace the new language either, according to Oberlin City Manager Gary Shike.
“I think the council got frustrated with not really getting answers to questions,” Shike said.
As well, the council’s consultant on power issues recommended against signing the contract. Consultant Joe Herz, Burr Oak, has had concerns about Sunflower Wind ever since he first came on the scene in September. At that time, he urged the city not to sign a contract that included a right of first refusal.
“He had some concerns with it,” Shike said of Herz and the latest contract offered up by Sunflower Wind. “He thought there would be better ways to go about it.”
Oberlin also isn’t in much of a hurry, given that it has a long-term contract for hydropower from the federal government.
Almost 17 years remain on a contract Oberlin has for that power, provided at about 3.5 cents per kilowatt hour.
“It figured in to it,” Shike said of the cheap hydropower.
The rest of the power comes from Hays-based Sunflower Electric, which is charging about 9 cents a kilowatt hour for the electricity.
Sunflower Wind was proposing to charge about 9 cents as well.
The city’s decision was a disappointment to Sunflower Wind, but the company didn’t close the door to future discussions.
Sunflower Wind representative Brice Barton said he is disappointed Oberlin isn’t moving ahead with the contract, but said his company plans to continue work on establishing a wind farm in Decatur County.
“We haven’t abandoned the whole project,” he said.
For now, much of Sunflower Wind’s efforts will focus on a new manufacturing plant that will be set up in Hutchinson, in part of what had been an Eaton plant.
There, they will begin construction on wind turbines that will then be used to fill the company’s own wind farms.
“Our goal was not to put up somebody else’s turbines in our wind farms,” Barton said. “So they definitely go hand in hand.”
The plant will be constructing turbines under license from a European company.
Once Sunflower Wind builds a surplus of turbines, it will then make them available to purchase.
The goal is to have turbines from the Hutchinson plant in operation by the end of this year. The turbines will be capable of producing 2.5 megawatts of electricity.
The plant also will resolve issues with availability of products.
“Right now, there is a three-year backlog to order a turbine,” Barton said. “The manufacture of our own is very advantageous.”
Sunflower Wind is looking at establishing a wind farm in Decatur County, but also is looking elsewhere.
Barton didn’t want to say exactly where they wind farms might be located, other than in Kansas.
In the future, Barton said he hopes Sunflower Wind and Oberlin once again can reach an agreement.
“When they’re ready to work with us, we’d be happy to work with them,” Barton said.
By Mike Corn
4 January 2008
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