July 8, 2014
Michigan

A ‘wind-win’ possible for iconic turbine

BY BRIAN McGILLIVARY | Traverse City Record-Eagle | July 8, 2014 | www.record-eagle.com

TRAVERSE CITY – The nation’s first utility-grade wind turbine stands dormant, a 160-foot statue that overlooks Grand Traverse Bay, but its blades could spin again under new ownership if a deal can be struck with a local wind farm operator.

Heritage Sustainable Energy of Traverse City offered the lone bid to buy the windmill off M-72 in Elmwood Township at a price that initially astounded its owners, Traverse City Light & Power. Heritage’s $1,100 offer for the 18-year-old windmill came in less than 1 percent of its estimated value of $375,000.

The utility’s staff members wants their governing board to accept the offer because that would be cheaper than the estimated $160,000 price tag to dismantle the windmill and sell it for parts.

“When you look at the offer it does, on its face, seem to be an insufficient amount, but when looking at the whole picture it does seem like the most economical way of getting out from … future costs,” said Tim Arends, TCL&P’s executive director.

The offer also comes with a sort of bonus: it could keep the windmill in operation.

“It was the first utility-grade wind turbine in the nation in 1996 and it really opened the door to wind power use by electrical utilities in this country,” Arends said.

The offer is contingent upon TCL&P and Heritage negotiating an acceptable agreement for the utility to purchase whatever energy the windmill generates for Heritage.

The last time TCL&P staff negotiated a contract with Heritage officials they ended up purchasing wind energy from the Heritage Stony Corners Wind Farm for 11 cents a kilowatt, a good price four years ago that today is double the going rate. Arends said he wants a price no higher than the utility’s average cost to purchase power, or about 7 cents a kilowatt.

John Taylor, utility board chairman, said the power purchase cost is the more important factor.

“Selling it at a low cost doesn’t concern me,” Taylor said. “What I do like is it looks like we have the ability to keep the turbine going and providing renewable electricity to Traverse City residents, but someone else, Heritage, is assuming all the risk to keep it going.”

Utility board members voted in December to decommission and remove the wind turbine after a long, costly, but ultimately unsuccessful attempt to return it to peak operating efficiency. One of its parts continually failed and caused other parts to break. Staff estimated it would cost up to $10,000 to bring in another set of experts to resolve the problem and secure repair parts, which were increasingly difficult to find.

The turbine is less than half as tall as today’s modern turbines that are designed to catch Michigan’s best winds. Its generator is considered inefficient by today’s standards, but at peak operation can produce enough electricity to power about 110 homes for a year.

Rick Wilson, Heritage’s vice-president of operations, said the only thing that makes sense with a wind turbine is to keep it operating because removal costs are prohibitive. Heritage officials already negotiated a property lease extension to cover the next 30 years.

Wilson said they possess the expertise to get the turbine back to full operation with just some technical upgrades to failed electronics. He said TCL&P staff did a good job maintaining the machinery, but they lack necessary expertise.

“We have the staff and relationships and operational skills you can only achieve when you are operating multiple turbines,” said Wilson, whose firm operates 53 utility-grade turbines. “It just sort of makes sense for us to take it over.