This is Community Wind Lisa Daniels Executive Director

This is Community Wind Lisa Daniels Executive Director of Windustry Financing Wind Power July 25, 2007

Outline n n n About Windustry Community Wind Energy Structure of Private/Farmer Owned Community Wind Projects Challenges for Community Development What’s Next

Windustry n n n n Increasing wind energy opportunities for rural landowners and communities. Non-profit organization based in Minneapolis, MN www. windustry. org The Windustry Newsletter Wind Easement Agreements National Community Wind Conference Wind Farmers Network

“Yep, they make some noise, but it’s the soothing sound of money being made. ” Louis Woodward, Texas Rancher, Landowner Prepared by Virtus Energy Research for Public Citizen and the SEED Coaltion

Community Wind Energy Defined n n n Simple and flexible concept Any number of turbines Connected either side of the meter one or more members of the local community has a significant direct financial stake KEY: Local ownership and local benefits

Benefits of Community Wind All the benefits of large wind development, plus: n n n Greater stimulation of local economies Increased local energy independence Delayed need for new transmission lines Increased competition in energy markets Greater acceptance of wind power

Community Wind Energy Success Stories n n n Farmer/Local Investors Local Utilities: Municipal Utilities and Rural Electric Cooperatives Schools Tribal Communities Community Institutions New Models for Wind Industry and Community Partnerships

Moorhead Public Service Moorhead, Minnesota n n Two 750 k. W turbines, installed in 1999 and 2001. Public utility- used their own funds to purchase the machine. Among the highest subscription rates in the nation and one of the early successful municipal projects. Several good Iowa examples as well, including Waverly, IA.

Illinois Rural Electric Cooperative Pike County, Illinois n n Planning a spring 2005 ribbon cutting for a 1. 65 MW turbine. Inspired by new IL wind maps that show some of the best wind in the state to be in IREC territory. Turbine will generate about 4% of IREC’s power needs, close to the 5% limit in wholesale power contract. Project supported by 3 grants (USDA, IL state grant, and IL Clean Energy Foundation) IREC Engineering Manager and project leader Sean Middleton.

School Wind Projects: K-12 Wind turbines can supply schools with clean energy, new revenue, and learning opportunities. Ø 8 school districts in Iowa have wind turbine from 50 to 750 k. W Ø Spirit Lake Schools pioneered the idea in 1993 with a 250 k. W turbine, followed by a 750 k. W turbine in 2003. Ø Other school projects in MN, IL, CO, PA, VT, MA, MI, tribal communities Spirit Lake, Iowa

Rosebud Sioux Tribe Rosebud, South Dakota n n n Dedicated a 750 k. W turbine in May 2003. Helped by DOE Tribal grant program and USDA RUS loan. “Breaking Trail” Ø First step for the ambitious wind power goals of Great Plains tribes. Project leaders Pat Spears and Bob Gough Photo courtesy of Intertribal COUP

Lamar, Colorado n n n Local project piggybacked on large wind project. Four 1. 5 MW GE turbines less than 25 miles from CO Green, a 162 MW project in Lamar Municipal Utilities (Lamar Light & Power and Arkansas River Power Authority) timed their project to coincide with Colorado Green. Ø Coordinated with CO Green to lower development, construction and maintenance costs.

Minwind Energy Rock County, Minnesota Minwind I and II: n n n Two LLCs owned by 66 local investors. Installed 4 950 k. W turbines in late 2002. Goals: local economic dev. , maximize return on investment, diversify local economy Tom Arends and Mark Willers, Presidents of Minwind I and II

Minwind Energy Rock County, Minnesota Minwind III-IX: n n n Seven more LLCs owned by local investors. Installed 7 1. 65 MW turbines in late 2004. Supported by USDA and Minnesota incentives. December 2004 Open House at new Minwind turbines.

Lawyers Bankers USDA Contractors Minwind Board Elected Officials Equipment Suppliers Investors State Energy Office Accountants Developer Accountants Minwind CEO

SMI & Hydraulics, Inc. Porter, Minnesota Photos courtesy www. smihyd. com

Federal Community Wind Incentives n PTC Ø Ø Hard to use it directly, need equity partner IRS Letter ruling CREBS (Community Renewable Energy Bonds) n n USDA Farm Bill Energy Title

Community Wind Incentives in Leading Midwest States n Minnesota: Ø Ø n Iowa: Ø Ø n n Production payment for projects under 2 MW. Standard tariff and power purchase contract for wind projects under 2 MW. Iowa Energy Bank- low interest loans. Net metering- unlimited for matched loads. Successful incentives address financing issues, provide access to capital, and/or strengthen the market for community wind. More policy in 2005… 2006… 2007

New Community Wind Incentives in Minnesota and Iowa (2005 & 2006) n Minnesota: Community-Based Wind Energy Development (C-BED Tariff) Ø Ø n MN utilities required to establish a C-BED tariff based on the net present value of the energy. Provides a long-term stable incentive for community wind projects. Iowa: Tax Credit for Small Renewable Energy Projects(and expanded in 06) Ø Ø Ø For projects up to 2. 5 MW owned by an Iowa resident, a farm operation or an electric cooperative. Provides 1. 5¢ per kilowatt-hour for 10 years for wind. Available for up to 90 MW of wind starting in July ‘ 06.

New Community Wind Incentives in Minnesota and Nebraska (2007) n Minnesota: Community-Based Wind Energy Development (C-BED Tariff) Ø Ø n Refined No cap on the PPA rate New Legislation for Nebraska Ø C-BED

What do Community Projects Need? n n n Access to equipment New and innovative ownership models Low cost financing Incentives that level the playing field Market for energy Pathway to market

Project Cost Escalation n Construction and equipment costs up 30 -40% in last 2 years Ø Booming industry • Ø Ø Ø Turbines and towers, construction teams and expertise are scarce Rise of price for copper, steel and other materials Higher transportation costs Warranty contracts

Factors Driving the Market n MN - Political pressure on utilities Ø Ø n IA – Incentives helping community projects compete with large wind projects and other resources Ø Ø Ø n Renewable Energy Objective (not a mandate) 800 MW goal of community projects from Governor’s office State Renewable Energy PTC Low cost financing Project owns Green Tags General Ø Ø Regulatory compliance (RES, REO, RPS, etc) Utilities beginning to see wind as stable long term energy resource and a good investment Maturing of wind industry Familiarity with technology and industry players

New Transmission and Wind Resource Maps = New Planning Approach Find maps and study report at: www. windustry. org/dg Study performed by Cap. X 2020 Utilities

Policy Opportunities n Energy topics are hot at both the state and federal level Now is the time to open dialogue with elected officials

Next Steps: New Legislation n One Example: US Senator Ken Salazar (CO) introduced s 672 - Tax Exempt Bonds for Community Renewables Letters of Support to Congress to urge: Ø Ø n Support of S. 672 Consider sponsoring it as well Addressed to Members of : Ø Ø Senate Finance Committee House Ways & Means Committee n On your own letterhead cc: : your own Senator and Salazar n More info n (www. refcoalition. com)

Today n n n Wind energy is a huge business opportunity With increasing constraints on regional transmission systems Requires new thinking for bringing about a new clean energy system Engaging local support is critical to almost every aspect of this business Community wind has a vital role.

Contact Windustry 2105 First Avenue South Minneapolis, Minnesota 55105 toll free (800) 946 -3640 Lisa’s phone (612) 870 -3462 fax (612) 813 -5612 Lisa’s e-mail lisadaniels@windustry. org www. windustry. org