July 31, 2012
Minnesota

Is much-delayed AWA Goodhue wind project in trouble?

By Brett Boese | The Post-Bulletin, Rochester MN | postbulletin.com 27 July 2012

ZUMBROTA – With each passing day, the controversial AWA Goodhue wind project appears more and more unlikely to be in operation by the end of this year. That uncertainty puts the future of the $180 million project in question after it has already bitterly divided parts of rural Goodhue County and drawn national attention.

The 78-megawatt project has faced an unprecedented permitting process that will hit three years this fall. No other wind project in Minnesota has needed more than 12 months for permitting since the state’s renewable energy standard was approved in 2007.

The delays have largely been caused by organized, persistent public opposition groups that have spent six figures fighting developers. The unusual timeframe has already cost the develoers more than $50 million in up-front funding, when the Section 1603 federal grant program expired after 2011. Millions more might be missed if the federal production tax credit is allowed to expire after 2012; six attempts by Congress to renew the production tax credit this year have either failed or been sent to committee for further review.

National Wind, the developer, has declined interviews since CEO Peter Mastic assumed control in the fall of 2011; every name and phone number on the company’s website, which used to include Mastic’s cell number, has been cleared except one. Calls and emails for this story were not returned. However, the company issued a written appeal in February that – when combined with recent developments – paints a bleak picture.

“Time is of the essence for the construction of the project,” wrote National Wind, which has already spent more than $1 million trying to get its permits. “Financing for the project is built around the existence of a federal tax credit that provides investors with an economic incentive to invest in renewable energy.”

Ground has yet to be broken, and National Wind has said construction on the 48-turbine project will take at least six months. The project must be operational by Dec. 31 to be eligible for the production tax credit, unless the tax credit is renewed.

Although Mastic has reportedly informed a local official that National Wind hopes to begin construction this month – its website still lists October 2010 – numerous unresolved issues would suggest that’s an overly ambitious timeline.

Pulling the plug on the project could also have consequences. With PUC approval, National Wind signed a Power Purchase Agreement with Xcel Energy in 2010. Xcel officials have declined comment on the matter, but canceling or altering the contract is expected to have financial ramifications for the wind company.

“I think this is the most troubled (wind project) we’ve ever encountered,” Minnesota Public Utilities Commission member Betsy Wergin said during a February hearing where the PUC denied the project’s avian and bat protection plan.

National Wind recently erected three additional meteorological towers in Goodhue County in order to begin compiling additional information for a revised avian and bat protection plan, which must be approved before construction can begin. Spokespeople from the U.S. Fish & Wildlife Service and PUC said they haven’t seen anything new from National Wind regarding the avian and bat protection plan since the first version was denied five months ago.

Officials from Belle Creek and Minneaola townships have tabled road-use agreement discussions with National Wind. The road-use agreements are necessary before construction can begin, though the developers already have an agreement in place with Goodhue County.

National Wind also is in the preliminary stages of seeking the country’s first incidental take permit for bald eagles. Wind company officials have toured the area with the U.S. Fish & Wildlife Service and the Minnesota Department of Natural Resources after filing its draft permit in February, but a Fish & Wildlife representative said last week that the agency hasn’t received “anything specific to the Goodhue project” since then.

“Right now, I think (the incidental take permit) is up in the air,” said Ashley Spratt of the U.S. Fish & Wildlife Service. “We can’t make any advancements until we receive the application.”

The Coalition for Sensible Siting, a citizens opposition group, is currently deciding whether to appeal the PUC’s site permit for the wind project. The Minnesota Court of Appeals sided with the PUC in June, but the Coalition for Sensible Siting has until late August to refile with the Minnesota Supreme Court. Coalition attorney Dan Schleck says the group is still considering its options, but coalition members have said the appeal is likely.

National Wind served some of its 215 participants with a breach of contract lawsuit in April for trying to cancel their agreements. Though the lawsuit has yet to be filed in district court – thereby protecting the names of individuals involved – Schleck, who also represents the defendants, says the discovery process recently began in that lawsuit.

The appeal is considered the last legal option for citizens to fight the project. If it’s denied, critics are only able to file lawsuits as individuals, which would literally pit neighbor against neighbor over nuisance or property value claims.

“At that point, it’s very personal,” Schleck said. “If you have two brothers, maybe it won’t happen. But if you have two neighbors who historically don’t like each other, anything could happen. This just snowballs.”