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School districts join in clean energy project to address budget woes  

Credit:  By Robert Channick, Special to the Tribune, Chicago Tribune, www.chicagotribune.com 20 August 2010 ~~

A plan by three struggling suburban school districts to create a revenue-generating wind farm has picked up some velocity this summer.

Empowered by recent legislation, Keeneyville School District 20, Carpentersville’s Community Unit School District 300 and Prospect Heights School District 23 have joined together to build a 13-turbine wind farm that would sell energy to defray their own electrical bills.

The unique project would be in rural Stark County, about 140 miles southwest of Chicago.

“This is the first of its kind in the nation. I don’t know of any other school districts (jointly) building a wind farm,” said Kirk Heston, CEO at Milwaukee-based Heston Wind & Renewable Energy, which is developing the project.

Facing operating shortfalls – even after broad layoffs and programming cuts – all three school boards approved the formation of a separate agency that will issue bonds, recruit investors and apply for federal grants to get the $50 million in needed financing in place.

The School Wind Consortium met officially for the first time last week. The group hopes to move quickly to get financing to take advantage of some $15 million in federal grants, which expire in December.

“We’ve been working to get it done all summer long, and now we have to implement it,” said Gary Ofisher, director of operations for District 20.

The agency would oversee the construction and operation of the farm, which could be up and running by fall 2011. Officials foresee about $3 million in annual revenues for some 30 years – the expected life of the wind turbines. The legislation allows the districts to take revenues out of the project equivalent to their own electrical costs, which right now are running at about $3.5 million per year combined.

While the consortium’s would apparently be the first scholastic wind farm, several downstate schools have already installed standalone, on-site turbines to generate electricity for their own facilities. Bureau Valley High School in Manlius was the first in 2005, followed by nearby Erie Community School District.

In 2007, Illinois adopted a net metering law requiring utilities to credit customers with renewable electricity generators for excess energy, further opening the door for other school districts, community colleges and municipalities to own and operate wind turbines to reduce costs. For most locations, however, installing the structures with their enormous blades proved impractical.

“In urban areas like mine, you can’t just put up a wind turbine,” said state Rep. Fred Crespo, D-Hoffman Estates. “It really didn’t work for the northwest suburbs or urban areas.”

Hoping to broaden the wind power option for schools, Crespo introduced legislation in 2009 that would have enabled offsite farms to take advantage of the net metering credit. ComEd and other utilities objected, and the plan didn’t fly.

“This would have resulted in the school district receiving free distribution and transmission service from ComEd, and these costs would have been charged to all of our customers,” said ComEd spokesman Antonio Hernandez. “ComEd believes this form of cost-shifting is unfair.”

Crespo also backed the new legislation, signed into law in June, which in essence turns the schools into taxable energy wholesalers.

With Stark County wind farm ordinances in place, the school districts have arranged to lease farmland for the massive, 400-foot-tall, 1.5 megawatt turbines. Designed by Heston Wind & Renewable Energy, which has been working with the districts throughout the process, the farm is expected to generate some 65,000 megawatt hours annually – enough energy for about 5,000 homes.

Although the power purchase contract has yet to be negotiated, the wholesale value could net the schools about $3 million annually. The revenues would be divided among the three districts, with District 300 taking 80 percent, and its much smaller partners splitting the balance.

“It’s a pretty good return on your investment, it’s just not one of those quick ones,” said Cheryl Crates, chief financial officer for District 300.

The sixth largest school system in the state, District 300 has more than 20,000 students from pre-kindergarten through 12th grade at 27 schools in McHenry and Kane counties. The district eliminated 114 teachers and cut more than $9 million from the budget, but still faces a $6 million shortfall for the coming school year, officials said.

The wind farm revenue won’t come soon enough to prevent depletion of $10.5 million in cash reserves, but it could offer long-term help in balancing the budget, Crates said.

Prospect Heights District 23 trimmed 10 positions and $1.3 million from its budget but projects a $1 million deficit for the 2010-11 school year, officials said. The district is considering going to voters next spring with a tax-increase request.

Located in northwestern DuPage County, District 20 reduced its staff by 29 positions for the 2010-11 school year to bridge a $1.6 million shortfall, officials said.

All three districts explored building an on-site wind turbine, but only District 300 is still pursuing that option at its two-year-old Hampshire High School campus. Stymied by FAA restrictions, a planned 400-foot, 1.5 megawatt turbine has been scaled back to a proposed 207-foot, 225 kilowatt turbine. Pending school board approval, the project would net the high school about $20,000 a year – about 10 percent of its annual energy costs, according to officials.

Competing against 16 private wind farms currently producing 2,300 megawatts of power for ComEd, the proposed venture won’t make much of a dent in the wholesale energy market, officials say. With school districts struggling nationwide, however, it has already generated great interest in academic circles.

“It’s totally unique, and the legislation that enables that project to work is also very unique,” said Kevin Borgia, executive director of the nonprofit Illinois Wind Energy Association. “We really hope it does come together because it could be a big benefit for schools in Illinois and nationwide.”

And Heston Wind & Energy is also looking to expand its efforts to other schools. The firm recently approached Glenbrook High School District 225 about starting a new consortium with a similar goal of creating and selling wind energy. District officials are looking into the proposal.

Freelance report Graydon Megan contributed to this report.

Source:  By Robert Channick, Special to the Tribune, Chicago Tribune, www.chicagotribune.com 20 August 2010

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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