Are energy answers blowing in the wind?

Eleanor Tillinghast, Advocate, March 17, 2005

______________________________________________________

The Hoosac Wind power plant will produce in one year the amount of electricity used in Massachusetts for half a day.[1] That’s the equivalent of 13 one-hundredths of 1 percent of the state’s annual consumption.[2]

At that rate, we would need 442 turbines on Berkshire mountains just to keep pace with the expected increase in the state's electricity consumption from 2006 through 2009.[3] We would need 484 turbines to meet the state’s target for consumption of wind-generated electricity by the end of 2009.[4]

Meanwhile, the cost of removing from our air the pollutants that project developer Enxco, Inc. claims will be offset by Hoosac would be less than $250,000 a year.[5] Those calculations are based on Enxco’s own numbers.[6] The more realistic numbers are even more dismal.[7]

As taxpayers and electricity ratepayers, what will we pay for the minuscule benefits of Hoosac’s 20 wind turbines? Enxco hasn’t publicized its financial projections, so this analysis is based on numerous other sources, which are documented at www.GreenBerkshires.org.

Over the life of the Hoosac project, Enxco could reap more than $80 million [Ed. note: Correct number is $90 million] in tax credits, renewable energy credits, and other subsidies.[8] In fact, Enxco is likely to profit more from the perks financed by taxpayers and ratepayers than from selling the electricity generated by the Hoosac turbines.[9]

For example, Enxco will receive at least $15 million in federal tax credits that can be used to reduce taxes on income from other operations.[10] It will write off about $14 million in accelerated depreciation on its federal income taxes,[11] reaping the full benefit over six years instead of the usual 20 years for conventional energy facilities.[12]

At the state level, it will profit from a 100-percent corporate tax deduction on net income, which applies to all costs incurred for installing wind turbines.[13] According to one source, it will be exempt from paying sales taxes on the turbine parts.[14] Locally, its Hoosac project appears likely to benefit from property tax exemptions.[15]

Each year, Enxco could sell more than $4 million in Renewable Energy Credits (RECs) that must be purchased by electricity retailers such as Mass. Electric.[16] Our state government has committed $17 million in price supports for the RECs.[17] Consequently, over a 15-year period, the total value of the Hoosac RECs could climb above $60 million.[18]

Those aren’t the only costs. Renewable energy quotas will probably trigger more expensive electricity bills. So far, I haven’t found an independent analysis of the fiscal impacts of our state’s Renewable Portfolio Standard (the requirement that a certain amount of electricity derive from renewable energy sources such as wind.) However, New York recently commissioned a study of its RPS, which is similar to ours. By 2013, electricity bills there could increase more than 2 percent for residential consumers and more than 4 percent for industrial users.[19] The study acknowledges that most ratepayers will see bill increases due to RPS.[20]

As of the end of 2004, Massachusetts had the eighth highest electricity rates in the nation, [21] nearly 48 percent higher than the national average. [22] Rate hikes have just been announced: The electricity bills of more than 1.3 million households in the state are increasing this month by 3 percent to 13 percent. [23] Adding another 2 percent to cover renewable energy would be a burden on many families.

Tourism businesses in the northern Berkshires will suffer.[24] Wind power boosters claim turbines will draw tourists. That’s ridiculous. People come here to escape industrialization, not to embrace it. Furthermore, developers are proposing wind-power plants on mountains and farms throughout New England, New York, and the Appalachians. New York alone must build an estimated 1,850 onshore turbines over the next eight years under its RPS.[25] At least 855 turbines have already been built, approved, or proposed along the Appalachians south of us.[26] In a few short years, places without turbines will be even more precious to sightseers.

Vermont seems to be the only state with residents, environmentalists, and politicians who foresee this, and they are objecting strenuously to wind power plants proposed there.[27]

It’s often said that towns with wind power plants get the benefits while surrounding communities suffer the consequences of ruined views. In fact, there are costs within the host towns, as well.

Wind turbine neighbors must endure noise, lights, and depreciated property values.[28] The wind industry claims property values aren’t affected by proximity to turbines, but people trying to sell their properties near wind-power plants say otherwise. In Vermont, Shirley and Don Nelson have a farm next to Lowell Mountain, where Enxco is trying to build a wind-power plant. After they retired and tried to sell the property, prospective buyers walked away upon hearing about the wind-power plans.[29] Homes that sell for less mean lower property taxes paid to the town.

The towns of Florida and Monroe may not receive as much revenue from the Hoosac Wind power plant as they expect. From Enxco’s plans, it appears that five of the Hoosac turbines will be on land owned by the town of Florida, and five on land owned by the town of Monroe.[30] The leases are between the towns and New England Wind LLC,[31] a limited liability company set up by Enxco.[32] Under the lease terms, it appears that each town could receive anything from $188,000 down to $14,062.50 a year [Ed. note: This latter number should be $11,250], depending on the output of Hoosac’s turbines, and the price of its electricity.[33]

Although Enxco is the sole owner of New England Wind LLC,[34] the leases stipulate that Enxco is not liable for payments to the towns.[35] It’s likely that New England Wind LLC has only one asset, the Hoosac Wind power plant.[36] After all the tax benefits have been wrung from the project and it no longer has any book value, New England Wind LLC could demand lease renegotiations or refuse to make lease payments. Hoosac would be worthless, and the town could not sue successfully to recover payments.

Since Hoosac will apparently be exempt from local property taxes, it seems that, other than a $2,000 pre-operating payment,[37] the only revenue the towns stand to receive is based on factors over which they have no control -- the output from the turbines on their respective properties, and the cost of Hoosac’s electricity.[38] Under its laws, Connecticut must receive a direct benefit from its investment.[39] How much of the electricity and RECs produced by the Hoosac turbines will be sent to Connecticut? Why should the local tourism economy, housing market, environment, and views of the northern Berkshires be jeopardized so that Hoosac electricity can go to Connecticut, instead?

[1] Enxco expects Hoosac to produce 84 gWh (84,000 MWh) annually. NEPOOL forecasts MA electricity consumption in 2006 at 60,600 gWh. Based on Enxco's projections, this means that Hoosac's output in all of 2006 will equal the state's electricity consumption in half of one average day that year.

Here’s the math: 60,600 gWh ÷ 365 days = 166.02739726 gWh used daily in MA, on average; 84 gWh ÷ 166.02739726 gWh = 0.506, or half a day.

Another way to do this math: 60,600 gWh ÷ 8,760 hours in a year = 6.9178082 gWh used every hour in MA; 84 gWh ÷ 6.9178082 = 12.142574 hours, or half a day.

By 2009, NEPOOL forecasts MA electricity consumption at 62,455 gWh annually. So Hoosac’s output will account for even less of the state's daily consumption, then.

[2] Enxco expects Hoosac to produce 84 gWh (84,000 MWh) annually. NEPOOL forecasts that MA electricity consumption in 2006 will be 60,600 gWh. Thus, Hoosac's 84 gWh will represent 0.001386 of MA's annual electricity consumption in 2006.

Here’s the math: 84 gWh ÷ 60,600 gWh = 0.00138613861.

[3] Here's the math:

MA projects 60,600 gWh consumed in 2006, and 62,455 gWh consumed in 2009;

62,455 - 60,600 = 1,855 gWh;

1,855 gWh = 1,855,000 MWh increase in consumption from 2006 through 2009;

1,855,000 MWh = (MW x 8760 hours per year) x .3196 (Enxco’s claimed capacity factor for Hoosac);

MW = 662.571936379;

662.571936379 MW ÷ 1.5 MW turbine = 441.714624252 turbines, or 442 onshore turbines.

(This assumes no offshore turbines will be built by the end of 2009, which I think is realistic given the fervent opposition to Cape Wind from the state's most powerful politicians on both sides of the aisle.)

[Email from Jay Wickersham, Noble & Wickersham LLP, to Arthur Pugsley, MEPA, Subject: Air emissions avoidance estimates for Hoosac Wind project, Friday, December 19, 2003 2:41 PM; ISO New England, April 2004 CELT Forecast, Energy & Peak Seasonal Demand By States & New England Region, NEPOOL State History Spreadsheet, and Energy Seasonal Peak Forecast Spreadsheet,  http://www.iso-ne.com/Historical_Data/forecast/long_run/LR_Fcst_Index.htm]

[4] It's very clear that the Cape Wind project in Nantucket Sound won't be built any time soon, if ever. The governor has repeatedly voiced his strong opposition. The attorney general has said he will sue to stop the project. Other powerful politicians are opposed to it. The US EPA and US FWS have all demanded more study. The secretary of environmental affairs has issued a certificate on Cape Wind's draft EIR that lists pages of studies and work that must be done for the final EIR. President George Bush just ordered the creation of a new federal panel to coordinate oceanic policy. This means that, for the foreseeable future, Massachusetts’s wind power projects will be developed onshore.

In a study funded by the Massachusetts Technology Collaborative (“MTC”), the Appalachian Mountain Club found that of 65 inland sites with enough wind, 62 are in the Berkshires. The other three all have limitations. Of the 96 miles of ridgeline comprising those 65 sites, 93 miles are in the Berkshires. (Coastal wind power plants are considered infeasible because of the cost of land, population density, and public safety concerns.)

In February 2005, the Massachusetts Division of Energy Resources came out with its Annual RPS Compliance Report for 2003. On page 6, it projects that by the end of 2009, the state will need 2,148,450 MWh from new construction of renewable energy sources. Rob Pratt, head of MTC's Renewable Energy Trust, said at a public meeting in North Adams in September 2003 that he expects 80% of that to come from wind power. That comes out to 1,718,760 MWh (2,148,450 x .80).

Here's the math to convert that to the number of turbines needed to satisfy the Massachusetts Renewable Portfolio Standard (“RPS”) quota. I'm using a 27% capacity factor which is the national average for all turbines (26.9%) and the national average for those that have come online since 2000 (26.7%). The Searsburg capacity factor was 20.43% in 2003 (the most recent number, based on the 2003 annual report of the facility owner.) The 30 MW Fenner NY capacity factor (with General Electric 1.5 MW turbines as will be used at Hoosac) was 19.2% in 2003, according to energy expert Tom Hewson. So 27% is a generous number:

(MW x (365 days x 24 hours)) x .27 capacity factor = 1,718,760 MWh

MW = 726.686960932

726.686960932 MW ÷ 1.5 MW turbines = 484.457973954 or 484 onshore turbines.

[Beth Daley and Scott Allen, “Wind farm gets initial state OK, but data sought,” Boston Globe, 3/5/05, http://www.boston.com/news/local/articles/2005/03/05/wind_farm_gets_initial_state_ok_but_data_sought/;
Kevin Dennehy and Ethan Zindler, “Interior: Wind study flawed,” Cape Cod Times, 3/4/05, http://www.capecodonline.com/special/windfarm/interiorwind4.htm;
Ethan Zindler, “EPA: Wind farm needs new study,” Cape Cod Times, 2/26/05, http://www.capecodonline.com/special/windfarm/epawind26.htm;
Kevin Dennehy, “Reilly vows wind suit,” Cape Cod Times, 2/19/05, http://www.capecodonline.com/special/windfarm/reillyvows19.htm;
Cornelia Dean, “Bush Forms Panel to Coordinate Ocean Policy,” New York Times, 12/18/04, www.nytimes.com; David Schoetz, “Romney in D.C., fights wind farm,” Cape Cod Times, 11/11/04, http://www.capecodonline.com/special/windfarm/romneyin11.htm;
Presentation by David Publicover, Appalachian Mountain Club, at Broad Meadow Brook Conservation Center and Wildlife Sanctuary, Massachusetts Audubon Society, 9/20/04; David Publicover, A Methodology for Assessing Conflicts Between Windpower Development and Other Land Uses, AMC Technical Report 04-2, Research Department, Appalachian Mountain Club, May 2004, pp. i, 3; Commonwealth of Massachusetts, Office of Consumer Affairs and Business Regulation, Division of Energy Resources, Annual RPS Compliance Report for 2003, 2/15/05, p. 6, http://www.mass.gov/doer/rps/rps-annual-05.pdf]

[5] Enxco uses the annual NEPOOL Marginal Emission Rate Analysis to calculate the amount of emissions of three pollutants that would be offset by operation of the Hoosac wind power plant. The pollutants are sulfur dioxide, nitrogen oxides, and carbon dioxide.

The most recent NEPOOL Analysis was done for 2003. Here are the numbers from the Analysis, and the amounts based on Enxco’s 84,000 MWh claimed electricity output for Hoosac:

Credits for these three pollutants can be purchased from brokerage firms such as Evomarkets and the Chicago Climate Exchange. Typically, companies buy the credits to offset the pollution they create, as mandated by federal and state laws. However, it is also possible to buy the credits and retire them from the market, so that they cannot be used to allow some companies to continue polluting. I took the trading prices from the 2/25/05 futures listings of Evomarkets and the Chicago Climate Exchange, so here are the numbers:

83.16 tons SO2 (× $665 = $55,301.40)

30.66 tons NOx (× $3,650 = $111,909)

49,518 tons CO2 (× $1.65 = $81,704.70)

The total is $248,915.10 for 2006.

It should be noted that the estimated marginal emission rates for these three pollutants have dropped dramatically since Enxco first started using this standard of measurement, and will continue to drop because of the state’s tough emission regulations. According to NEPOOL’s annual analysis, from 2000 to 2003 (the most recent numbers available), the estimated marginal emission rates have dropped as follows:

SO2 has dropped 68% -- ((6.2 lbs/MWh - 1.98 lbs/MWh = 4.22 lbs/MWh)  ÷ 6.2 = .6784) = 68%

NOx has dropped 62% -- ((1.9 lbs/MWh - 0.73 lbs/MWh = 1.17 lbs/MWh) ÷ 1.9 = .6157) = 62%

CO2 has dropped  21% -- ((1,488.1 lbs/MWh - 1,179 lbs/MWh = 309.1 lbs/MWh) ÷ 1,488.1 = .2077) = 21%

[Email from Jay Wickersham, Noble & Wickersham LLP, to Arthur Pugsley, MEPA, Subject: Air emissions avoidance estimates for Hoosac Wind project, Friday, December 19, 2003 2:41 PM ; ISO New England Inc., 2003 NEPOOL Marginal Emission Rate Analysis, December 2004, Table 1.1: 2003 Marginal Emission Rates,
http://www.iso-ne.com/Planning_Reports/Emissions/Marginal_Emissions_Analysis_2003.pdf;
http://www.iso-ne.com/Planning_Reports/Emissions/;
http://www.evomarkets.com;
http://www.chicagoclimatex.com/]

[6] See previous footnotes: Enxco uses 84,000 MWh as the expected annual output for Hoosac; and it uses the annual NEPOOL Marginal Emission Rate Analysis to calculate pollution emission offsets.

[7] Enxco claims Hoosac’s annual output will be 84,000 MWh, which translates to a capacity factor of 31.96%. The national average capacity factor for all projects is 26.9%, and for projects that have come online since 2000 is 26.7%, according to energy analyst Tom Hewson. The capacity factor for Searsburg (the only wind power plant in New England, and about 10 miles north of the Hoosac project area) was 20.43% in 2003. Therefore, if we were to use a 27% capacity factor instead of a 31.96% capacity factor for the calculations in footnotes 1, 2, 3, and 5, the outcomes would be lower. As just one example, using the more realistic but still generous capacity factor of 27%, Hoosac’s annual output its first year would be (30 MW nameplate rating x 8760 hours a year) x .27 capacity factor = 70,956 MWh instead of 84,000 MWh.

[8] See footnotes below for specifics, but, in sum, the numbers are: 10 years of PTCs, $15,120,000; IRS, accelerated depreciation over six years, $14,000,000; 15 years of REC sales to electricity suppliers, $47,355,000; MTC purchase of RECs for years 6 through 15, $17,075,142.00, for a total of $93,550,142.

This number does not take into account inflation (which would increase the value of PTCs), increased cost of RECs over the next few years, state corporate income tax deduction, property tax exemptions, or sales tax exemptions.

[9] In a recent presentation, Ed Feo, a leading wind industry attorney, listed the financial benefits of wind power projects as follows: tax benefits (accelerated depreciation and production tax credits) and cash flow (power purchase agreement, REC sale agreement, and subsidy payments.) He said that the tax benefits comprise two-thirds of the value of wind power projects. As you can see in his list of benefits, the power purchase agreement (i.e. the sale of the wind-generated electricity) is just one of five revenue streams. [Ed Feo, Financing Challenges and Structures of Renewable Projects Based on Available Incentives, presented at American Bar Association, Renewable Energy Resources Committee, Multi-Site Brown Bag/Teleconference, "Renewable Energy: What Kinds of Incentives are Needed and How do the Currently Available Incentives Work?," 12/15/04, pp. 3-4, http://www.abanet.org/environ/committees/renewableenergy/teleconarchives/121504/feoppt.pdf]

[10] The federal IRS offers a Renewable Electricity Production Credit (often referred to as a Production Tax Credit or PTC) to wind power producers. The baseline is 1.5 cents per kilowatt hour (kWh), or $15 per megawatt hour (MWh.) That number is adjusted for inflation. Right now, it is 1.8345¢/kWh (1.5 cents × 1.2230 = 1.8345¢/kWh), rounded to 1.8¢/kWh. A wind power project is eligible for 10 years of PTCs.

Without taking inflation into account, (1.8¢/kWh × 84,000,000 kWh of Hoosac output = $1,512,000) x 10 years = $15,120,000 over ten years, assuming Hoosac's output is as high as Enxco expects, and that the output level stays the same.

The PTC is due to expire at the end of 2005. However, it is widely expected to be renewed because of a recently announced bipartisan effort to extend the PTC for five years, through 2010.

http://www.irs.gov/irb/2004-17_IRB/ar09.html;
Federal Register, Renewable Electricity Production Credit, Publication of Inflation Adjustment Factor and Reference Prices for Calendar Year 2004, Volume 69, Number 58, Page 15436, http://www.gpoaccess.gov/fr/index.html;
http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=US13F&State=Federal&currentpageid=1; “Federal Proposal Would Extend PTC for Five Years,” Renewable Energy Access, 3/17/05, http://renewableenergyaccess.com/rea/news/story?id=23875]

[11] Enxco has estimated the total costs of building Hoosac to be $40 million. At a 35% federal corporate marginal tax rate, that would reduce Enxco’s tax liability by $14 million. Here’s a chart of the calculation:

The $40 million of installed capital costs include everything related to the preparation, equipment, construction, and commissioning of Hoosac.

[http://mepadata.env.state.ma.us/pls/portal30/MEPA_WEB.MEPA_QUERY.SHOW_PARMS, type in EOEA #13143; Glenn Schleede, Misplaced State Government Faith in “Wind Energy” – This Time by the Kansas Energy Council, 3/1/05, p. 12; National Wind Coordinating Committee, “Wind Energy Costs,” Wind Energy Series, January 1997, pp. 1-2;
http://www.ies.ncsu.edu/dsire/library/includes/map.cfm?State=MA&CurrentPageId=1]

[12] Charles Kubert, et al., Community Wind Financing, Environmental Law & Policy Center, May 2004, p. 18, http://www.elpc.org/energy/windhandbook2004.pdf

[13] Tom Vannah, “Wind, Power and Wilderness: The price of making clean energy on Florida Mountain,” Valley Advocate, 3/10/05, http://valleyadvocate.com/gbase/News/content?oid=oid:103188;
Nils Bolgen, Massachusetts Programs and Incentives: Wind Energy in New England Island and Coastal Communities, Massachusetts Technology Collaborative, 11/5/02, p. 5, http://www.ceere.org/rerl/events/ne_islands_2002/3_Bolgen_Massachusetts_Incentives_and_Programs.pdf

[14] Charles Kubert, et al., Community Wind Financing, Environmental Law & Policy Center, pp. 15, 16, http://www.elpc.org/energy/windhandbook2004.pdf

[15] Charles Kubert, et al., Community Wind Financing, Environmental Law & Policy Center, pp. 15, 16, http://www.elpc.org/energy/windhandbook2004.pdf

[16] Under the Massachusetts 1997 electricity restructuring act, all retail electricity suppliers must obtain a certain percentage of the electricity they sell to customers from renewable energy sources. This is known as the Renewable Portfolio Standard ("RPS"). The obligation began in 2003:

The electricity retailers prove their purchases by buying Renewable Energy Credits ("RECs," sometimes known as green tags) from renewable energy producers such as Enxco. Every MWh qualifies for one REC.

The last price for RECs in 2004 was $51.25. Enxco projects 84,000 MWh produced annually from the Hoosac project. It expects to begin operation in 2006, but the REC value here is for 2004 (although purchased on 2/3/05), so this calculation is approximate: $51.25 x 84,000 MWh = $4,305,000 a year.

That would mean the value of its RECs would total $4,305,000 annually. The number for its first year in operation (2006) would be close to that. For the foreseeable future, REC prices can be expected to rise because there is a shortage.

[225 CMR 14.00 - Renewable Energy Portfolio Standard, p. 10, http://www.mass.gov/doer/rps/225cmr.pdf;
http://www.evomarkets.com/assets/mmu/mmu_rec_feb_05.pdf;
Tom Vannah, “Wind, Power and Wilderness: The price of making clean energy on Florida Mountain,” Valley Advocate, 3/10/05, http://valleyadvocate.com/gbase/News/content?oid=oid:103188]

[17] http://www.masstech.org/Project_lst_rslt.asp?ID=57

[18] REC prices can be expected to rise for several reasons: 1.) there is a shortage now; 2.) the state projects a shortfall for the next few years, at least; and 3.) the state sets an Alternative Compliance Payment (“ACP”) that effectively acts as a cap on REC prices, and that number has been increasing since it was implemented. Nonetheless, since the state sets the ACP cap for the present year only, we don’t have a specific number for future years. So, for our purpose here, we’ll use the established REC value at the end of 2004, $51.25.

In a recent set of responses to questions regarding its awards to wind power developers, Massachusetts Technology Collaborative used a scenario that sounds like that used for the Enxco award. Here’s the quote:

“A generator is able to sell RECs to a creditworthy party under a 15-year contract for 100 percent of the RECs produced during the first five years of operation of the Eligible Facility and 60 percent of the RECs produced during the next 10 years of operation. Hence, the generator only requires, and only proposes to MTC, the sale of 40 percent of the RECs produced for 10 years beginning in the sixth year of commercial operation.”

So, here’s the math for 15 years:

$51.25 x 84,000 MWh = $4,305,000 a year for REC sales (based on final 2004 REC sale price)

$4,305,000 x 5 years = $21,525,000

($4,305,000 x 10 years) x .60 = $25,830,000

MTC award for years 6 through 15 = $17,075,142
Total = $64,430,142, based on 2004 REC prices.

[Tom Vannah, “Wind, Power and Wilderness: The price of making clean energy on Florida Mountain,” Valley Advocate, 3/10/05, http://valleyadvocate.com/gbase/News/content?oid=oid:103188;
Commonwealth of Massachusetts, Office of Consumer Affairs and Business Regulation, Division of Energy Resources, Annual RPS Compliance Report for 2003, 2/15/05, pp. 10, 11, http://www.mass.gov/doer/rps/rps-annual-05.pdf;
http://www.mass.gov/doer/rps/acp.htm;
http://www.evomarkets.com/assets/mmu/mmu_rec_feb_05.pdf;
“Bidder Questions and MTC Responses,” Question 6.2, p. 6, http://www.masstech.org/Grants_and_Awards/CE/MGPP_2_QA_v9_2005_0301_POSTED.pdf;
http://www.masstech.org/Project_lst_rslt.asp?ID=57]

[19] New York State Department of Public Service, NYSERDA, Sustainable Energy Advantage, LLC, and La Capra Associates, New York Renewable Portfolio Standard Cost Study Report II, Volume A, Case 03-E-0188, Revised 2/27/04, p. 18, http://www.dps.state.ny.us/rps/RPS-COST-STUDY-II-Volume-A-2-27-04rev1.pdf

[20] New York State Department of Public Service, NYSERDA, Sustainable Energy Advantage, LLC, and La Capra Associates, New York Renewable Portfolio Standard Cost Study Report II, Volume A, Case 03-E-0188, Revised 2/27/04, p. 18, http://www.dps.state.ny.us/rps/RPS-COST-STUDY-II-Volume-A-2-27-04rev1.pdf

[21] http://www.neo.state.ne.us/statshtml/115.htm;
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

[22] ($0.1088/kWh - $0.0737 = $0.0351) ÷ $0.0737 = 0.476255, or 48%.
[http://www.neo.state.ne.us/statshtml/115.htm;
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html]

[23] Peter J. Howe, “Ratepayers face electric-bill jolt: Deregulation falls short on promises,” Boston Globe, 2/22/05, http://www.boston.com/news/local/articles/2005/02/22/households_face_electric_bill_jolt?pg=full

[24] Eleanor Tillinghast, “Wind turbines don’t make good neighbors,” 5/14/04, http://www.greenberkshires.org/wind_power_postings/wind_turbines.html

[25] The state of New York commissioned a two-part study from GE Power Systems Energy Consulting on the effects of integrating wind power into its electrical grid. Phase 1 of the study was produced in February 2004. Phase 2 is in the draft stage, and is to be released in March 2005.

The Phase 1 report looks at the potential of wind generation to meet part of the state's 25% Renewable Portfolio Standard goal. It considers a total wind generation potential of 10,026 MW, of which 600 MW would be offshore, and 9,426 MW would be onshore. The draft Phase 2 report considers two alternate scenarios with 3,300 MW of wind generation (see p. 1.2.)

According to the Phase 1 report, New York expects onshore wind power plants to generate 6,593,652 MWh annually (43.69% of all renewables) by 2013. In that report, GE established estimated capacity factors for designated regions, ranging from 25% to 30% and above (see pp. 5.3 and 5.4.) In its Phase 2 draft report, GE asserts that the overall capacity factors of those regions are on the order of 30% (see p. 2.14.) According to energy expert Tom Hewson, the 2003 capacity factor for the Fenner NY wind power plant was 19.2%. Therefore, I struck a compromise, and used 27% as the capacity factor, which is the national average, and the average for all wind power plants installed nationally since 2000.

The equation for determining the number of turbines is as follows: 6,593,652 MWh = (MW x 8760 hours in a year) x .27 capacity factor. MW, the unknown factor, is 2,787.77. Dividing that by 1.5 MW turbines = 1,858.5 turbines by the end of 2013. This figure is probably low.

[State of New York Public Service Commission, Order Regarding Retail Renewable Portfolio Standard, Case 03-E-0188 – Proceeding on Motion of the Commission Regarding a Retail Renewable Portfolio Standard, 9/24/04, pp. 27, Tables 1, 7,
http://www3.dps.state.ny.us/pscweb/WebFileRoom.nsf/Web/85D8CCC6A42DB86F85256F1900533518/
$File/301.03e0188.RPS.pdf?OpenElement;
Richard Piwko, Project Manager, GE Power Systems Energy Consulting, The Effects of Integrating Wind Power on Transmission System Planning, Reliability, and Operations, Report on Phase 1: Preliminary Overall Reliability Assessment, prepared for New York State Energy Research and Development Authority, 2/2/04, p. 3.5, http://www.dps.state.ny.us/Phase1FinalPreliminaryReliabilityAssessmentReport_020204.pdf;
Richard Piwko, Project Manager, GE Power Systems Energy Consulting, The Effects of Integrating Wind Power on Transmission System Planning, Reliability, and Operations, Report on Phase 2: System Performance Evaluation, prepared for New York State Energy Research and Development Authority, DRAFT, 2/3/05, http://www.nyserda.org/rps/draftwindreport.pdf]

[26] http://johnrsweet.com/Personal/Wind/PDF/windplants-boone-20041227.pdf

[27] http://www.kingdomcommonsgroup.org;
http://www.glebemountaingroup.org

[28] Eleanor Tillinghast, “The Dark Sides of Wind Power,” North Adams Transcript, 1/26/05, www.thetranscript.com,
http://www.greenberkshires.org/wind_power_postings/the_dark_sides.html

[29] Jeanne Miles, “Plans for Wind Power Polarize Vermont,” Caledonian-Record, 3/14/05, http://www.caledonianrecord.com/pages/top_news/story/b1e156a20

[30] Looking at Enxco’s site plans, turbines 12, 14, 15, 16, and 17 are on land owned by the town of Monroe. Turbines 8, 9, 10, and 11 are on land owned by the town of Florida. The cleared area for turbine 13 straddles the line between lands owned by each town, but the turbine location appears to be in Florida.

[31] Wind Farm Lease between Town of Monroe and New England Wind LLC, Franklin Country Registry of Deeds, Book 4778/Page 116, 1/12/05, www.masslandrecords.com;
Wind Farm Lease between Town of Florida and New England Wind LLC, Berkshire North Registry of Deeds, Book 1189/Page 344, 1/10/05, www.masslandrecords.com

[32] Certificate by Enxco (East Coast) Inc., Franklin County Registry of Deeds, Book 4093/74, 9/30/02, www.masslandrecords.com

[33] The leases state that “Quarterly Operating Payments shall be equal to the greater of the following: (a) two and one-half percent (2.5%) of the Gross Operating Receipts or (b) Two Thousand Eight Hundred Twelve and 50/100 dollars ($2,812.50).”

We don’t know the cost of electricity from the Hoosac turbines, but the Brodie electricity will be sold to MMWEC for $36.50/MWh for 22 years, so we’ll use that figure here. (84,000 MWh ÷ 20 turbines) x 5 = 21,000 MWh) × $36.50 = $766,500 a year.

However, if the capacity factor were 27%, the output would be: ((30 MW x 8760) x .27 = 70,956 MWh) ÷ (20 turbines ÷ 4) = 17,739 MWh) x $36.50 = $647,473.50. Using the 2005 APC of $53.19: (($53.19 x 17,739) = 943,537.41) + $647,473.50 = $1,591,010.90 x .025 = $39,775.272 x 4 quarters = $159,101.08 annually.

In this article, I over-calculated the lower annual payment. I multiplied $2,812.50 x 5 = $14,062.50. Since the payments are quarterly, the number should be $2,812.50 x 4 = $11,250.

[Wind Farm Lease between Town of Florida and New England Wind LLC, Berkshire North Registry of Deeds, Book 1189/Page 344, 1/10/05, www.masslandrecords.com;
Wind Farm Lease between Town of Monroe and New England Wind LLC, Franklin Country Registry of Deeds, Book 4778/Page 116, 1/12/05, www.masslandrecords.com]

[34] Enxco (East Coast) Inc. filed a certificate with the Franklin County Registry of Deeds showing that it is the only “member” of New England Wind LLC. It’s worth noting that Enxco has several entities involved in the Hoosac project. Here are the names I’ve encountered, so far:

Enxco, Inc.

Enxco Development Corporation

Enxco (East Coast) Inc.

Enxco East Coast Inc.

Hoosac Wind LLC

New England Wind LLC

Northeast Wind LLC (in partnership with the Connecticut Clean Energy Fund.)

[Certificate by Enxco (East Coast) Inc., Franklin County Registry of Deeds, Book 4093/74, 9/30/02, www.masslandrecords.com]

[35] Wind Farm Lease between Town of Monroe and New England Wind LLC, Franklin Country Registry of Deeds, Book 4778/Page 116, 1/12/05, p. 14, www.masslandrecords.com;
Wind Farm Lease between Town of Florida and New England Wind LLC, Berkshire North Registry of Deeds, Book 1189/Page 344, p. 14, www.masslandrecords.com

[36] I have not seen any Enxco documents on this issue, but it is standard practice in the wind power industry.

[37] Wind Farm Lease between Town of Florida and New England Wind LLC, Berkshire North Registry of Deeds, Book 1189/Page 344, 1/10/05, p. 6, www.masslandrecords.com;
Wind Farm Lease between Town of Monroe and New England Wind LLC, Franklin Country Registry of Deeds, Book 4778/Page 116, 1/12/05, p. 6, www.masslandrecords.com]

[38] Hill Engineers, Architects, Planners, Inc., “Special Permit Application for enXco Incorporated: Hoosac Wind Project, Florida/Monroe, Mass.,” 10/6/03, p. 21; Press Release, “Clean Energy Fund Teams up with enXco to Build Pipeline of Wind Energy Projects,” Connecticut Clean Energy Fund, 11/27/01, http://www.ctcleanenergy.com/w3c/news/34.php;
“Investments and Initiatives A to Z,” Connecticut Clean Energy Fund, http://www.ctcleanenergy.com/w3c/investment/investments_list.htm

[39] Press Release, “Clean Energy Fund Teams up with enXco to Build Pipeline of Wind Energy Projects,” Connecticut Clean Energy Fund, 11/27/01, http://www.ctcleanenergy.com/w3c/news/34.php;

"Northeast Renewable Energy, LLC, a joint venture with enXco, was formed to undertake feasibility studies necessary to evaluate and recommend worthy energy projects for the generation of electricity using renewable energy for the benefit of Connecticut residents." [Investments and Initiatives, CT Clean Energy Fund, http://www.ctcleanenergy.com/investment/debt_equity.html];

"Connecticut Innovations manages this investment fund, which the Legislature created to promote the production and use of clean energy in Connecticut. Projects in which we invest may be based anywhere in the world, but must benefit Connecticut ratepayers." [Connecticut Innovations
http://www.ctinnovations.com/site/initiatives/ct_clean_energy_fund.asp]