Community Wind Projects Locally sited Locally owned

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Community Wind ProjectsLocally sitedLocally
owned

• Western Wind
• Power
• Paul R. Woodin
• pwoodin_at_gorge.net
• 509.261.0219

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Small Renewable Power Projects in Oregon

• There have been almost no new community owned
  renewable projects in Oregon in the last 20 years
• Most new projects have been commercial
  developments
• This is because there has not been a meaningful
  power market for small projects the available
  power rates would not allow for financing
• All this changed in Oregon with the new PUC
  ruling this May

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Changes in Oregon Power Market

• Oregon PUC ruled on a 1-½ year investigation that
  created a fair power market for small scale
  renewables
• Up to 10-MW standard contracts
• 15 to 20 year power purchase terms
• Fair power rates based on regulated utilities
  avoided cost rates calculated at current gas
  prices
• Effects power sales to PacifiCorp, PGE, and Idaho
  Power

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Commercial and Community projects Different
ownership different size

• Commercial Projects
• 100s of MW in size
• Bid into utility RFPs
• large parcels of land with strong winds
• Require access to large transmission systems

• Community Projects
• Limited to 10 MW
• Sell to a different power market
• Require small parcels of land
• Can access much smaller transmission systems
• Can be very lucrative for local landowners and
  communities

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Community Renewable projects--Only a few sites
in any area--

• Local Sponsorship Local ownership
• Not feasible in all areas
• Community acceptance public dialog
• Sensitive siting issues
• Columbia Gorge
• Coastal areas
• Avian studies
• Commercial winds
• Transmission access within approx 2 miles

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Community Projects can have several structures

• Private ownership
• Local landowners form an LLC to build their own
  project
• Community ownership
• Community non-profit organizations (schools,
  counties, irrigation districts) financing their
  own project
• Joint private/community ownership
• Counties and towns partnering with local land
  owners to build a jointly owned project

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Two Typical Business Structures work for
Community based Projects

• FOR-PROFIT
• Equity funded project takes advantage of
  Production Tax Credits, Accelerated depreciation,
  and cash flow
• Can be used by local land-owners, communities,
  and joint ownerships
• Taxable and pays property tax
• NON-PROFIT
• 100 Municipal bond financed by non-profit groups
  like schools, counties, towns, etc. Landowners
  can participate
• Non-taxable and does not pay property taxes

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Production Tax Credits

• Federal Production Tax Credits (PTCs) are
  available for Wind, Bio-mass, Small Hydro, and
  other renewable projects
• Up to 1.9 cents/ kwh produced for first 10 yrs of
  project
• Projects are also eligible for 5 yr accelerated
  depreciation of project costs
• Investors must have tax appetite to take
  advantage of credits normally C-corp. companies
• These tax credits have real value to renewable
  projects and can bring investments equal to
  25-30 of project costs
• Allows bio-mass and hydro to use investment
  financial models traditionally used by wind
  projects

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Public/Private Partnerships

• A new economic model emerging
• Communities partnering with local land owners by
  developing for-profit projects and then
  partnering with investors who bring equity to the
  projects
• Selling federal Production Tax Credits bring in
  Equity that reduces amount of financing for
  project by up to 25
• Local owners and community become general
  managers and receive cash flow of project
• Investor receives tax credits and accelerated
  depreciation for first 10 yrs of project, then
  flips out of ownership

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Resource Assessments

• A number of counties in Oregon are starting to
  look at Resource assessment studies to determine
  what type of community renewable projects are
  realistic in their areas
• Analyze Transmission Capacity in region
• Identify Potential renewable sites
• Wind
• bio-mass
• small hydro

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County Resource Assessments

• Communities are using the Resource Studies to
  help shape new renewable energy visions in their
  regions.
• Revenue generation
• Distributed generation by local energy projects
• Economic Development and increased tax base.
• Potential for local communities to partner with
  private businesses in joint projects

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Transmission Assessment

• Western Rural States have weak electrical grids.
• Grids designed for light rural loads
• Too small to handle much power generation
• Many potential sites are too far from properly
  sized transmission to afford projects
• Best sites are within 2 miles of suitable
  transmission
• 3 phase
• 69 kV or 115 kV transmission lines
• BPA steel towers are TOO COSTLY to connect to

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Solutions

• Partner Partner Partner
• For much more than a single turbine, most groups
  need to work with a team
• Some of the best projects can be when landowners
  team with communities
• Brings together land, permitting, and political
  strength
• Opens doors most landowners do not have access
  to.
• Multiple landowners in a team provide an
  opportunity to pick optimum sites rather than the
  ole-family home site
• 10 MW projects are 17 Million corporations
• It takes help from legal firms, power managers,
  design and construction experts, and financial
  institutions
• Teams build corporations individuals rarely do

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• Community Renewable Projects
• Realistic opportunities in Oregon
• Takes time and study to understand the issues
• There are excellent resources in the state to
  facilitate planning
• T H E E N D !!