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Wind power will come with ‘no risk’ to City

The final agreement for the City of Medicine Hat to buy wind-generated electricity through a public-private partnership and a windfarm on city land was spelled out at Friday’s Energy Committee meeting.
It means no capital cost for the city, and the ability to meet the goal of using nine per cent renewable energy years ahead of its target date, says a city alderman who has championed the project.
“We’re taking no risk,” said Ald. Ted Clugston of the deal presented by WindRiver president Kipp Horton.
“They pay all the upfront costs and if the turbines don’t turn, we don’t pay.
“But I think it’s a good deal for both of us.”
The city will sign a 20-year agreement to purchase power at a fixed rate from a three-turbine, six megawatt facility built entirely at the expense of WindRiver Power Corporation north of the Canadian Fertilizer Plant in the Box Springs area.
In exchange, WindRiver will pay the city $335,000 per year to lease the city-owned land and related property tax.
After 20 years the city can take over the facility at no cost, or ask WindRiver to dismantle the facility at the company’s expense and terminate the lease.
For Horton, whose company operates in the Pincher Creek area, the deal means a long-term contract with a stable municipality that he can advertise to future investors and customers.
“We’re partnering with the city and that will support the project,” said Horton. “We’re working with a municipality on leading edge technology, and it’s a balanced approach. The innovative windfarm, mixed with natural gas generation together are the cleanest forms of energy production.”
Of the total $10-million construction cost, about $2 million would be spent locally, he said.
The farm could be in operation by the end of 2013, with access roads built next spring, and foundations put in place over the summer. The 80-metre-tall (260-feet) towers would be erected by cranes next autumn, and could be visible from the Trans-Canada Highway.
The City first began feasibility studies of a windfarm in 2005 and secured final approval to construct from federal and provincial regulators in late 2010.
But, the original plan called a much larger city-owned and operated project that had a possible $25-million price tag.
This scaled down private project will produce an average of three-per cent of the city’s power needs while eliminating 10,400 tonnes of carbon dioxide per year.
That is the equivalent of taking 2,000 cars off the road.
It will be connected to the city power grid along Box Springs Road, with WindRiver covering the cost.
“I was never in favour of (the city) building this because of the capital costs,” said committee member Ald. Phil Turnbull, adding that now there is no investment by the city, as well as new tax revenue on land that would likely otherwise be barren.
“We have a portion of our society that believes we should be expanding our use of green energy,” said Turnbull. “This provides that at a reasonable cost to taxpayers, and that’s why I’m supporting this.”
According to Clugston the fixed rate involved in the contract sits in the 10 cents per kilowatt hour range with a yearly rider that ties the rate to the consumer price index.
That 10 cent figure, says Clugston, is close to the fixed rate that the City offers to small residential and commercial ratepayers of 9.87 cents – a rate calculated from the projected cost of natural gas generation plus 10 per cent profit.