Windpower,

It Could Mean $$$$$$$

by Robert White

Robert White is a local landowner who has taken up research on wind power and it’s possibilities and pitfalls. You may contact Robert at 544-3736- Ed.

There’s Good and Bad in Power from the Wind.

The primary problem with wind power is that it is not dispatchable, meaning that power cannot be produced at all times when it is needed because the wind stops blowing, or blows too hard. The electric grid has to be balanced so that supply put into the grid by the utility equals demand taken out of the grid by customers. When power from a wind turbine stops flowing into the grid, some other kind of generating source has to input that loss of capacity back into the grid. Usually this means that a fossil fuel power plant has to ramp up to take over the loss of power from the wind turbine. In some instances a local dispatchable power source has to be constructed near the wind farm to balance the grid when the wind farm goes off line.

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 Dispatchable power sources include: nuclear, natural gas, diesel, coal, oil, and to some extent hydro-electric, which can all be ramped up and down at any time depending on the demand. Wind and solar power are not dispatchable. Dispatchable renewable power sources include methane, bio-diesel, and ethanol. A lesser problem caused by wind farms involves federal legislation requiring transmission line companies to allow independent power producers, like wind farms, to input and sell electricity into the transmission grid (Federal Energy Regulatory Commission Order No. 888, 889, and 890).  Transmission lines are constructed by utilities to distribute power to their own customers and these utilities did not anticipate having to accommodate other power producers. All the transmission lines in America are already running at full capacity and there is precious little more capacity available for independent power producers to exploit. When transmission lines run at near or above capacity any component failure or mistake in managing the system can cause a catastrophic failure across the region, causing blackouts.Two interesting and readable articles on the web discussing these issues are:“The True Cost of Electricity from Wind Power”, by Minnesotans For Sustainability,discussing the hidden costs to taxpayers and utility customers for supporting wind energy –

http://www.mnforsustain.org/windpower_schleede_costs_of_electricity.htm

“What’s Wrong with the Electric Grid?”, by Eric J. Lerner,

discussing the negative impact on the electric grid caused by federal requirements allowing independent power producers (wind farms) to connect to the transmission grid –

http://www.aip.org/tip/INPHFA/vol-9/iss-5/p8.html

On the local level these wind power problems are outweighed by the royalties paid to landowners and taxes paid to local government for the wind turbines. A 1.5 megawatt turbine pays about $9.5K in royalties to the landowner and about $10K in local ad valorem taxes. One hundred wind turbines could increase local tax revenue by at least $1 mil. per year, benefiting virtually all local citizens, depending on how local government spends this “windfall” in tax revenue. Cimarron County will go from a region burdened with nontaxable state school lands to a county with a tax surplus. How our local elected officials spend that money will make history.

An introductory brochure discussing wind energy benefits is available from the National Renewable Energy Laboratory at:

http://www.nrel.gov/docs/fy05osti/37602.pdf

On the local level these wind power problems are outweighed by the royalties paid to landowners and taxes paid to local government for the wind turbines. A [one] 1.5 megawatt turbine pays about $9.5 thousand in royalties to the landowner and about $15 thousand in local ad valorem taxes per year. A hundred wind turbines could increase local tax revenue by at least $1 million per year, benefiting virtually all county residents, depending on how local government spends that “windfall” in tax revenue. Cimarron County could go from a region burdened with low taxed state school lands to a county with a tax surplus. How our local elected officials spend that money will make history.

An introductory brochure discussing wind energy benefits is available from the National Renewable Energy Laboratory at:

http://www.nrel.gov/docs/fy05osti/37602.pdf

A “must visit” for Cimarron County landowners and residents is the interactive wind power map at: 

http://www2.ocgi.okstate.edu/website/owpi2/viewer.htm

 This map shows the two high energy wind zones in our county plotted against the township:range grid, with roads, streams, and existing 69kv transmission lines.

Wind power companies make money in three primary ways. They sell electricity at around $45 per megawatt hour. They also enjoy an accelerated tax depreciation schedule allowing them a six-year period to deduct the cost of the wind farm off their taxes. And they enjoy an aggressive Production Tax Credit of about $19 per megawatt hour of power produced during the first ten years of operation. Tax credits are like real money, wind farms pay their federal taxes in credits, not dollars, until they run out of credits. One negative side effect of all this “front loading” of tax benefits for wind farms is that once the tax advantage is gone after the first five to ten years, there is an incentive for the wind farm developer to sell the project. Landowners with wind turbines should think seriously about how they would deal with a new project owner, or a bankrupt project owner, or a 300 foot tall relic in their pasture no longer paying its way. Requiring the wind farm developer to post a bond equal to the cost of dismantling the farm and renewing the land is the common way to avoid these risks.

Cimarron County is in store for significant capital infusion, new tax dollars, job opportunities, and general economic growth. Using a proper public dialogue, coupled with foresight and planning, we ought not to squander this lucky break.

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