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March-April 2006
By Jill K. Cliburn
The four powerful wind turbines sited just outside Bowling Green, Ohio, do not look that big from a distance. That is what the first graders from Wood County Public Schools said, as they approached in two yellow buses for a school field trip. But when they arrived and walked up close, craning their necks toward the sky, the kids were amazed.
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| Ten municipally owned electric utilities in Ohio participate in Omega-JV6--the Ohio Municipal Electric Generating Agency Joint Venture 6. Photo courtesy AMP-Ohio |
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Paulie Shaffer, environmental educator for Wood County, told the young visitors that each 1.8-MW wind turbine rests on a tower that is 260 feet tall. At the top of its arc, the tip of each spinning blade reaches almost 400 feet. “That’s more than twice as tall as the football stadium lights at Bowling Green State University,” she said.
The wind project, developed by AMP-Ohio and Green Mountain Energy, is both enormous and gentle. “It has a calming effect,” Shaffer said. The blades spin slowly, and the sound of the machines in full operation is “something like waves beating on a shore.” Shaffer said the project leaves visiting VIPs as awestruck as it leaves the school kids. But for grown-ups, the business strategy behind the project is at least as impressive as its physical presence.
When the first phase of construction was completed in 2003, this was the first utility-scale wind project in Ohio, and one of the first east of the Mississippi. Careful planning by all the partners and a lot of pluck from Daryl Stockburger, the now-retired utilities director in Bowling Green, proved that the region was ripe for wind development.
Stockburger first took an interest in wind power decades ago. Bowling Green is a college town, so there is a lot of interest in new ideas. But the utility, which Stockburger headed for 18 years, must balance many needs and options in making its resource decisions. First, it joined other members of AMP-Ohio, the state’s joint action agency, to sponsor a low-impact hydro power project. Bowling Green also invested in a private landfill gas project, and developed a highly cost-effective load management program, equivalent to one MW in peak capacity.
In the late 1990s, Stockburger thought it might be time to add wind power to the mix. He worked with Green Energy Ohio, a nonprofit energy agency, to lay the technical groundwork for a wind power demonstration. He worked with volunteers to monitor wind resources around Bowling Green and to outline a project plan.
The utility looked to AMP-Ohio to help develop the project. Jay Myers, assistant utilities superintendent for a neighboring AMP-Ohio member utility in Cuyahoga Falls, said Stockburger often talked about renewable energy at AMP-Ohio meetings. But it was at an informal gathering—a foundation-funded trip to Sacramento, Calif.—where Myers, Stockburger, and other AMP-Ohio members started to talk seriously about the wind project. “Sometimes I guess you have to take a trip across the country to meet with your neighbors,” Myers said.
Cuyahoga Falls wanted to sponsor one large turbine by itself. If Bowling Green still wanted to sponsor at least one turbine and other AMP-Ohio cities wanted to join in, then the project was already approaching a good commercial size. AMP-Ohio agreed to put together a joint venture. It typically uses this mechanism for funding special projects that some, but not all, AMP-Ohio members wish to support. In all, 10 municipally owned electric utilities joined the wind project. It was officially called Ohio Municipal Electric Generating Agency Joint Venture 6 (OMEGA-JV6).
The first phase of the project was completed in November 2003 and the second a year later. Each phase involved putting up two 1.8-MW Vestas wind turbines. Each participant in the joint venture owns a portion of the project, led by Bowling Green (4.1 MW) and Cuyahoga Falls (1.8 MW).
There are many ways for public power to approach wind development. Some smaller projects have been cash-financed out of utility reserves. Many projects use municipal bond financing, over terms ranging from 12 to 25 years. The 2005 Energy Policy Act introduced a new reduced-cost financing option for public power utilities called clean renewable energy bonds. Some public power utilities work with private partners who can tap federal tax credits and private investment capital. While project costs vary, the rule of thumb is $1.5 million per MW of installed wind capacity. According to Stockburger, economies of scale kick in once a project has four to six turbines of at least one MW each. AMP-Ohio wanted to work on that scale, but it had to find a creative way to manage the financing.
The joint venture chose private-issue bonding through Fidelity. Besides a low interest rate, the arrangement offered flexibility in the length of the term. Currently, partners expect to pay off the debt in 13 years from date of issue. “We could lengthen that term, but the sooner we pay it off, the sooner we’ll be enjoying the equivalent of free energy,” Stockburger said. “That’s just the opposite of a new natural gas or coal plant. Fossil fuel costs are increasing, and I believe they will continue to increase over the life of any new plant.”
Skeptics point out that wind generation is never completely free, because the utility has to pay operation and maintenance costs. “We planned a way to cover those costs, too,” said Pam Sullivan, marketing vice president for AMP-Ohio. Green Mountain Energy was interested in securing green power supplies in the region around the time that AMP-Ohio was putting its project plan together. Green Mountain Energy invests in new renewable energy projects, Sullivan said. In this case, Green Mountain agreed to buy all the environmental attributes (also known as green tags renewable energy certificates) associated with the Bowling Green project. Its long-term purchase agreement made financing easier for the joint venture and it provides revenues that cover more than just operations and maintenance costs. Any money left after O&M costs are paid will help pay down the debt service, Sullivan said.
Because Green Mountain owns the project’s environmental attributes, Bowling Green utility customers cannot claim they are getting green power unless they pay a premium to buy it. That’s a little confusing for folks who plainly see the wind towers on the outskirts of town. “We tell our customers that Bowling Green Utilities supports wind development—on behalf of everyone—but that buying green power is a choice for each customer to make,” Stockburger said.
He also reminds customers that a green power purchase supports a variety of renewable energy sources—not just wind. Many customers have responded well. The percentage of households and businesses in Bowling Green that subscribe to green power is well above the national average. “But all of our customers are proud of their turbines,” Stockburger said. There’s a big difference between detailed energy accounting and button-busting community pride.
Green power accounting aside, the fact that the project feeds the distribution grid actually makes it more cost-effective. “We feel fortunate that we didn’t have to face transmission interconnection issues with this project,” Stockburger said. Siting was relatively easy, since the project is located on county land, right next to the landfill. Distribution upgrades were modest, including a recloser for the site, which boosts system protection. Bowling Green and other AMP-Ohio cities receive network transmission service from First Energy, an Ohio investor-owned utility. From First Energy’s perspective, the wind project acts like a large industrial load, which is readily managed. “If we used wind to meet 20 percent of our load, then the intermittent nature of the resource might be a problem. But right now, I believe it works out well,” Stockburger said.
Distributed wind generation on this scale (7.2 MW in all) can be highly workable for joint action agencies, Sullivan said. This is especially true for utilities east of the Mississippi, where it is difficult to site a sprawling wind farm, and where it is not necessary to transmit electricity over long distances to reach a load center. AMP-Ohio also believes that giving member utilities the option to subscribe has worked well. “In our case, it is especially important to offer choices, because we have members in different states and in different transmission regions,” Sullivan said. AMP-Ohio is monitoring possible sites for more wind development in the state.
Green Mountain Energy is also enthusiastic about partnering with public power utilities to bring more renewable energy projects online. Green Mountain is already providing green power and developing relationships with joint action agencies in other states. The wind project at Bowling Green is a good model for the way joint action agencies can enhance a green power marketing program with renewable energy developments that customers can readily see, a company official said. The Bowling Green wind project also has a direct link to one new, local project—a solar PV installation in partnership with Bowling Green State University and Bowling Green Utilities. The installation is 30 kW, but revenues collected as Green Mountain purchases the environmental attributes will finance system expansion up to 250 kW.
Bowling Green and AMP-Ohio have had one unique advantage in developing these innovative projects, Sullivan said. That is, Daryl Stockburger’s leadership. In fact, most public power wind projects have relied on a champion for a good measure of their success. This case is no different, except perhaps that many people would not guess just how persistent and inventive Stockburger could be. “He strikes most people as so soft-spoken,” said environmental educator Shaffer. For many people, a visit to the wind site is a lesson in how one man, in one small town, can start something that turns out to be very big, she said. Stockburger retired last fall, but still follows regional energy developments and he might return to work if the right project came along.
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