After some fine-tuning of language, the City Council approved a contract allowing a wind energy company exclusive rights to study whether wind power generation will work for a small portion of David City’s future power needs.
The Council voted unanimously May 28 to grant Bluestem Energy Solutions, based in Omaha, an exclusive contingent development agreement to study the feasibility of generating a consistently usable amount of energy for the city.
Adam Herink, the company’s vice president, said that the city has almost zero risk and can benefit greatly in the event that the energy is developed on a fixed price for 25 years.
“We are very confident in the economics of these deals. This could be a substatntial saving to the city,” Herink said.
The vote on the agreement was set for May 14, but it was pushed back to the May 29 Committee of the Whole meeting, which doubled as a special meeting advertised in advance.
Councilman Mike Rogers had asked for the delay since he had not received information from Bluestem that was shared earlier in May.
Bluestem will study more closely the local wind patterns and look into siting and other factors for installing a wind turbine that would be 80 meters tall. A turbine would require building lines to would transfer power to the city’s electrical grid at a rate of 2 megawatts – a rate of usage that is always constant in the city.
Under the city’s contract to purchase power from Nebraska Public Power District, a local utility can receive up to 2 megawatts of power from a renewable energy source.
Herink said the city would not be liable for any costs under the contract with Bluestem, unless the city backed out of the contract before the firm’s study was done.
“I see this as a very low risk decision,” Herink said.
If the city would become dissatisfied with the study as it is being completed, the city could just wait until the end of the work and no further work would proceed.
“It just goes away,” Herink said.
Mayor Alan Zavodny put it another way.
“We’re engaged but we haven’t bought the ring yet,” Zavodny said.
However, assuming that the study finds a workable wind pattern, Bluestem would then ask the city to sign up with a 25-year contract to buy power from the wind generator, Herink said.
“When we come back with a final price that is a bigger commitment,” Herink said.
The future potential involves the sale of carbon credits offered by the government. Entities that are emitting carbon dioxide or other greenhouse gases into the atmosphere pay for the right to do so. The credits can be sold by “green” energy companies such as Bluestem.
Businesses that are involved in reducing carbon emissions or who produce low emissions in general can sell carbon credits on the Chicago Climate Exchange.
Herink said the recent increases in coal and other types of power generation are causing the growth in wind power genration. Wind energy can help cities by producing at least a portion of the energy needed while keeping the cost from rising year to year. The reason is that the power source, the wind, is free.
Herink said the wind energy industry is becoming more mature and companies have learned from the development, reducing some of the risk that is expensive in new technologies, Herink said.
In March, Bluestem’s contract for a study was approved by the Loup Public Power District. The company is building wind turbines near Valentine and Springview in northern Nebraska.
The company isn’t releasing the names of all of its potential customers, but Herink said that David City’s consistent usage of power makes it a good prospect.
Herink said in early May that David City’s size, power consumption and its location in regard to regional wind patterns was the reason for Bluestem’s interest.
Studies show that Nebraska is third nationally in terms of wind energy potential.
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