Developer: Dairy Air Wind dilemma caused by state regulators 

HOLLAND – The Dairy Air Wind Project developer needs more time to build a smaller wind turbine on a farm in Holland because of “an unpredictable regulatory process that is out of alignment” with legislative goals for more renewable energy.

The DAW developer also says delays in the process are costing the chance to earn essential federal tax credits.

DAW’s attorney told the Vermont Public Utilities Commission last week that the commission should give DAW an open-ended deadline to raise a 1.5-megawatt turbine on Dairy Air Farm.

DAW is not the first farm-based wind project to run afoul of state deadlines designed to encourage smaller renewable energy projects. The ill-fated Derby Line Wind Project of two large wind turbines for two Derby and Holland farms had similar problems.

Dairy Air Wind Memo

DAW has a contract under the state’s standard-offer program to receive preferential rates for a 2.2-megawatt capacity turbine.

But DAW does not have a certificate of public good yet for any turbine and, even if it did, DAW doesn’t have enough time to raise and “commission” that turbine by the standard-offer deadline in July.

DAW applied for the smaller turbine and open-ended deadline last fall. The commission hearing officer Thomas Knauer asked for more information.

In its response March 5, DAW states that a smaller-capacity turbine and an open-ended deadline would allow the project to be shovel ready when it receives a certificate of public good.

Dairy Air Wind is not just a “placeholder” in the standard-offer contract queue, but a real project based on evidence already before the commission, according to the DAW memo.

DAW states it “has not ‘gamed’ the system by executing a contract for a theoretical or nascent project” like two other developers did who were later denied changes.

In this case, DAW states that it made “reasonable” assumptions early in the process that a single wind turbine of 2.2-megawatts could be permitted, procured and constructed by the end of 2019, making the developer eligible to receive federal tax credits worth 30 percent.

The tax credits available now are 18 percent and will disappear in 2020, DAW notes.

“In 2016, when Dairy Air Wind submitted its bid for a standard offer contract, it was unimaginable that the commission would require more than 12 months to adjudicate a Section 248 CPG proceeding for a single wind turbine in an open working farm field,” DAW stated.

“But for the commission’s discretionary decisions … that delayed the proceeding beyond any reasonable expectation and inconsistent with the statutory commissioning milestone, the DAW project could have been under construction now at 2.2MW (or pursuing its rights on appeal if the CPG were denied),” DAW states.

The commission caused delays and uncertainties involving months and years, DAW states.

“For example, the commission granted permissive intervention to more than a dozen individual parties on the same or similar issues; it bifurcated hearings on Dairy Air Wind’s petition at the eleventh hour based on facts known to the commission in 2017; it deferred a ruling on a dispositive motion for summary judgment for 232 days, well after the scheduled date for hearings had passed; and it has failed to enforce Dairy Air Wind’s right to timely discovery and reimbursement of costs for noncompliance with the rules notwithstanding well supported motions to compel.”

The longer the process dragged on, the more limited the options were for wind turbine models, DAW stated.

The Dairy Air Wind Project “would be the first and only wind project over 100 kilowatts to be successfully developed under the standard offer program since the Vermont Legislature created the program 10 years ago,” DAW’s attorney concludes, asking the commission to grant the changes to the standard-offer contract and allow the project to be heard on the merits.

Derby Line Project

The Derby Line wind project, unlike Dairy Air Wind, started without much opposition. But failures to alert Canadian abutters and other errors caused delays as opposition mounted.

Developer Encore Redevelopment pulled the plug on one turbine close to the Canadian border in Holland, asking for an extension to raise the other turbine on a farm field in Derby.

The commission refused to grant an extension of the deadline to raise that turbine, saying the developer had an aggressive schedule that didn’t allow enough time to get a CPG in time to keep the preferential electricity rates essential for the project.

At the time, the commission said that the program was for rapid deployment of small renewable energy projects that would get preferential electricity rates.

The Derby Line project is not similar in one way to the DAW project. The Derby Line project developer bought out the energy contract from another developer, assuming the aggressive schedule. DAW has shepherded its own project from the beginning.