Colorado Community Wind Developers

Colorado Community Wind Developers

Project Profiles

From CREF Community Wind Developers Meeting in Burlington, CO

May 12, 2005

The Colorado Renewable Energy Forum (CREF) sponsored a community wind developers meeting in Burlington, CO on May 12, 2005. The meeting brought together representatives of 6 communities that are interested in owning all or a portion of a wind farm that sells energy to a utility such as Xcel or a local rural electric association. The goal of the meeting was to gain a better understanding of the local groups seeking to develop a community wind project and to determine what issues should be addressed to advance community wind projects in Colorado.

CREF is working with the following definition of community wind from the Great Plains Windustry Project (www.windustry.org): “Locally owned, commercial-scale wind projects that optimize local benefits. Locally owned means that one or more members of the local community has a significant direct financial stake in the project other than through land lease payments, tax revenue, or other payments in lieu of taxes. Commercial-scale, for this purpose, means all projects that are too large to qualify for net-metering.”

Community Wind’s positive impacts beyond generating clean renewable energy include its capacity to stimulate the local economy by creating new jobs, new business opportunities, and bringing new investment to the community; strengthens rural communities by broadening the tax base and generating new income for farmers; and keeps energy investment dollars local.

Below is a description of each of the community wind developers in Colorado that attended the May 12 meeting. Also included with the descriptions are the perceived challenges and obstacle each group shared at the meeting.

Prairie Wind Energy, LLC

Prairie Wind Energy, LLC is composed of 5 landowners residing in southeast Colorado near the town of Lamar in Prowers and Bent Counties. Twenty-two local people have invested in the entities first project called Signal Hill. A feasibility study was conducted by SeaWest along with the collection of wind data that began on September 1, 2004.

In November, 2004 the organization submitted a bid for the Signal Hill project as part of Xcel Energy’s Renewable Solicitation. Signal Hill was one of only 3 projects to be selected for Xcel’s short list and it continues to be on track for completion by the end of 2005. When complete the project will include 46 turbines with a generation capacity of 69 MW. In addition to Xcel Energy’s consumers, Prairie Wind is exploring other utility markets including the Arkasas River Power Authority (ARPA).

Proposed projects are organized around the parent company Prairie Wind Energy, LLC with currently two project entities under it:

Signal Hill (involves the 5 landowners that are members of Prairie Wind). The project site is four miles south of the existing Lamar turbines. This is a 69 MW that will sell its energy to Xcel Energy.
Tumbleweed (involves all 5 members of Prairie Wind and one other individual that is not a member of Prairie Wind). This project is located in Bent County.

The Signal Hill project is currently dealing with two significant challenges to overcome in the short term. The project requires the installation of an 18 mile transmission line to a substation. Even with a new transmission line other problems may need to be solved. They are waiting for wind turbines to be committed. Turbine manufacturers are running short due to the precipitous rise in demand after Congress extended the production tax credit in October 2004. Prairie Wind remains in close contact with several turbine manufacturers.

Baca Green Energy

Baca Green Energy has brought together several landowners and 28 investors from the county to pursue the development of a 2 to 3 turbine project. In 2004 SeaWest was hired as a consultant to conduct a feasibility study. On September 15, 2004 anemometers were hooked up to monitor the wind. A second consultant worked with Baca Green to submit a bid to Xcel Energy’s Renewable Solicitation in November 2004. The bid did not make Xcel Energy’s short list.

Major challenges for Baca Green have included access to transmission lines; obtaining a power purchase agreement with a utility; and the inability of investors to take advantage of the production tax credit because of its application only to passive income. Fortunately, the county commissioners are interested in a wind project and have been supportive of Baca Green’s efforts.

Presently the organization is continuing to look for opportunities for advancement toward the development of a 2-3 turbine project. They are looking for another consultant that would help them submit proposals and are communicating with the local rural electric association (Southeast Colorado REA). A critical obstacle remains: finding an area where the transmission lines are available.

Project Quixote

Project Quixote is a unique approach to community wind. Their development structure involves local investors from many regions of Colorado and a partnership with the international wind developer PPM.

The parent company called Quixote Wind, Inc. intends to establish separate entities for each project. The first proposed project will be called Quixote Venture I. Subsequent projects will be called Quixote Venture II, Quixote Venture III and so on.

Venture I is planned for an area near Lamar in southeastern Colorado. The proposed project to be developed by PPM will have 100 turbines with 20 turbines owned by Quixote Venture I. The partnership with PPM aims to have Quixote own 20% of the turbines constructed for each Venture. This project proposal was submitted into Xcel’s Renewable Solicitation in November 2004, but was not selected. It has been resubmitted as part of Xcel’s All-Source Solicitation. The goal for each project is to create community owned projects owned by Colorado investors that includes landowners and local communities.

Beginning in 2004, Quixote has met with potential investors throughout the state that would invest in Quixote Ventures to take advantage of the production tax credit. Not only are they seeking PTC investors, but also cash investors. Quixote intends to be a financial vehicle for many groups to participate in community owned wind projects like Venture I and others. Investor money could assist in financing projects that might not otherwise get built.

Increased opportunities to take advantage of the PTC are sought by Quixote. The organization receives financial support from Boulder Community Hospital (BCH), but since it is a not-profit it is unable to take advantage of the PTC. Moreover, BCH is not able to trade PTCs to other entities with a tax appetite that could take advantage of the PTC. Quixote would like to see greater PTC liquidity in the future.

SEC regulations also pose a challenge for Quixote. With their current organizational structure they cannot formally advertise or actively search for investors in rural communities. SEC regulations require that they only approach potential investors with whom Quixote has a pre-existing relationship with.

Quixote has begun examining other markets. They are now speaking with additional utilities to develop projects. They have communicated with Ft. Collins and Colorado Springs municipal utilities, Longmont, and several Colorado school districts.

Sedgwick County Wind Committee

Community Wind ideas in Sedgwick County in northeast Colorado were born out of the county commissioners desire to more aggressively pursue economic development projects. More than 3 years ago the commissioners approached the local CSU cooperative extension agent, Gary Lancaster, and requested that he join an effort to examine economic development projects that could be implemented. It was from this request that Mr. Lancaster began researching wind energy and meeting with local landowners to establish a wind committee.

The wind committee had discussions to incorporate as an LLC. However, it never evolved into such an entity. Instead, a committee of landowners continued to meet and pursue a wind project that would provide both royalty and lease payments for each turbine installed. Mr. Lancaster stated that it is difficult for farmers to put money at risk when joining an LLC. Throughout the period of researching and planning the committee and the Cooperative Extension office have kept a low profile (e.g. no one attempted to solicit the media for a story).

In 2003 the committee set up wind anemometers in two parts of the county. The Governor’s Office of Energy Management and Conservation provided a monitoring tower through the State’s “anemometer loan program”. This tower was placed in the western part of the county on the highest point (200 ft. above the surrounding land). Another tower was placed in the eastern section near the S. Platte River. Wind monitoring was supported by a group called POWER out of North Dakota State University. NRG in Vermont provided very helpful information on how to configure a tower. In addition the committee installed a tracking device called IPAC onto a monitoring tower. The IPAC is a digital system that plugs into the data logging unit on the tower. The IPAC is assigned a phone number (like a cell phone) enabling it to be called by a computer. A computer operator is then able to monitor the activities of the equipment on the tower (i.e. weather vanes, anemometers, temperature gauges etc.) The data from the IPAC can be downloaded from the tower and summarized. Unfortunately, the wind committee has been unable to obtain a phone number from a cell phone company as of this date.

The wind committee has established a relationship with JW Prairie WindPower LLC based in Lawrence, Kansas and owned by a German company. JW Prairie WindPower has worked with landowners to create a project plan with 10 turbines each with a capacity of 2 MW and royalty payments based on generator efficiencies. The project will have a generating capacity of 20 MW that can be directed at center pivot irrigation in the summer and power that will have to be sent entirely to other markets in the winter. Energy produced will be sold to Highline REA and/or Tri-State G&T. The project is scheduled to be completed in 2006 near a substation in the eastern part of the county. It might have been scheduled for a 2005 completion date, but the lack of available generators has delayed its start date. The proposed project will receive financing from John Deere.

The County has provided some financial relief for landowners seeking wind turbines. County Commissioners recently broadened the list of acceptable uses within lands zoned agricultural to include wind turbines.

The major problems in advancing a project involved transmission. The committee’s frustration reached a high point when attempting to gain access to a transmission line. The committee met with wind engineers who provided information about the grid within the Highline REA service territory. They were told the grid needs to be updated and that there are TOTE constraints.

Although many in the county are reluctant to believe the project will become a reality, and the committee continues to maintain a low profile, the Sedgwick Wind Committee is on track to have a 20 MW project generating electricity in 2006.

East Yuma County Wind Group, LLC

A 100% farmer owned wind project near the town of Wray is closely linked to two other wind projects. The local farmers have formed the East Yuma County (EYC) Wind Group LLC.

In 2002 a high school science teacher in Wray shared his vision of a school-owned wind turbine that would generate electricity to be sold to offset the cost the district was paying for energy. Local landowners and farmers joined the school wind committee and saw the potential for wind energy development going beyond the school district. They started researching the potential for a wind project owned by local farmers that would involve multiple generators.

The local farmers communicated with the private commercial developer Invenergy who proposed a project near Wray and submitted a bid as part of Xcel’s Renewable Solicitation. The 100% farmer owned component was planned to be built in conjunction with the bigger Invenergy project to take advantage of the economies of scale benefits during construction and sharing the transmission connection. In the summer of 2004 the farmer lead group received a USDA Value-Added Producer grant of $128,000 to finance the feasibility study. The feasibility study included a meteorologist that created a power curve analysis.

Presently, the EYC Wind Group’s proposed project involves 4 Clipper turbines each having a capacity of 2.5 MW (for a total capacity of 10 MW). The turbines are already committed by Clipper. A WAPA transmission line may be available for the project’s energy and Highline Energy Association’s Wauneta Substation is under consideration as the connection point. In the spring of 2005 the EYC Wind Group applied for a second USDA Value-Added Producer Grant for $150,000. Earlier this year they submitted an unsolicited bid into Xcel for the project.

The major challenge for the EYC Wind Group has been dealing with the lack of open capacity on Tri-State’s transmission lines. In addition, they have had difficulty dealing with Tri-State’s wheeling charges and required transmission study.

City of Burlington

The City of Burlington’s Mayor and City Manager stated that they are interested in a wind project, but have only begun to learn about wind energy. Significant interest for wind development is being voiced to the community’s leaders. A local school has recently approached the city government to discuss the possibility of installing a turbine.

The town is moving forward with activities to determine the feasibility of a wind project. This year the town will set up wind monitoring equipment. The city manager believes a good transmission line connects to Burlington; the line should be able to receive and send additional power. The town also owns the local distribution system.

Back Return to CWL's Home Page