harnessing the winds at spanish fork canyon: four –year struggle and economic analysis
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Harnessing the Winds at Spanish Fork Canyon: Four –Year Struggle and Economic Analysis. Cathy L. Hartman, Ph.D. and Edwin R. Stafford, Ph.D . Co-Directors Center for the Market Diffusion of Renewable Energy and Clean Technology Western Extension Directors Conference - PowerPoint PPT PresentationTRANSCRIPT
Harnessing the Winds at Spanish Fork Canyon:
Four –Year Struggle and Economic Analysis
Cathy L. Hartman, Ph.D. and Edwin R. Stafford, Ph.D.
Co-DirectorsCenter for the Market Diffusion of Renewable Energy and Clean Technology
Western Extension Directors ConferenceThanksgiving Point, Utah
April 1, 2009
Proposed Spanish Fork Canyon Wind Project– Virtual composite (2004)
November 2004
• Dean Davis, Windward Engineering -- “small turbine” test site
• Class 6 – “outstanding” wind resources
Evidence of Spanish Fork’s wind resource
Davis contacts Tracy Livingston of Wasatch Wind
Wasatch Wind
• Wind Project Development
• Space frame towers
• Crane-free “Hi-Jack” system
Utah Wind Map (2003)
Spanish Fork is not on the map!
Municipal, state, and federal policies
Siting issues
Market uncertainties
Turbine shortage
Procuring investors
NIMBY – Community concerns
Tracy’s five year journey!Key barriers facing the Spanish Fork Project
April 2005 – Wasatch Wind distributes 3000 flyers to residents within one mile of site
Only 50 residents attend meeting
Livingston presents plan
First Hurdle: Gaining Local Approval
Noise level at 50 decibels = traffic noise on nearby Highway 6 between 1 a.m. and 4 a.m.
Avian study – no threat identified
Siting Studies
Land leases Property tax revenues Dividends to investors Reduced coal-fired power pollution
Community and Environmental Benefits
“… the ugliest and most ungodly thing you’ve ever seen.”
Citizen response is mixed…
“… the ugliest and most ungodly thing you’ve ever seen.”
“… with windmills, I can see the mountains. With haze from coal plants, I can’t see the mountains.”
Citizen response is mixed…
Wasatch Wind applies for re-zoning
Residents, again, divided:
“It’s going to detract from our mountains”
“It will be an improvement as the gravel pit is already an eyesore”
“It is a better alternative to mass suburban development”
Zone application with City CouncilJune 2005
City Council approves zone changeunanimously
Destined to become the nation’s most urbanized wind project!
Spanish Fork Wind Project is a go!
Negotiation of power purchase agreement (PPA) with Rocky Mountain Power (2004-06)
Procurement of equity investors
Second Hurdle: Negotiating Financial Agreement and Investors
Monopoly utility for most of Utah – Not a free market!
Key issues:◦ No established cost-determination method ◦ Needed to set Utah pricing policy
Negotiating with Rocky Mountain Power
Avoided cost – “old coal versus new wind”
Livingston’s breakeven 6 cents per kWh
Negotiating with Rocky Mountain Power
Avoided cost – “old coal versus new wind”
Livingston’s breakeven 6 cents per kWh
Negotiating with Rocky Mountain Power
Rocky Mountain Power offers only 4.7 cents per kWh
Public Service Commission steps in
Least Cost/Least Risk Mandate
Old coal was cheaper than new wind – but is it less risky?
Livingston argued that “least cost” mandate emphasized “plan for today, but not for the future”
Public Service Commission
Livingston procures 5 to 6 cent per kWh deal with RMP
Delay results in loss of key investor, John Deere
Contract settled June 2006
January 2006, local TV channel re-broadcasts the April 2005 zoning approval meeting…
Third Hurdle: Re-gaining local approval (2006-07)
January 2006, local TV channel re-broadcasts the April 2005 zoning approval meeting…
Re-broadcast sparks public outcry – citizens demand moratorium
Third Hurdle: Re-gaining local approval
“Monstrous, colossal, shocking…”
Property values “will plummet … if turbines are erected”
“I’m not against ‘green energy,’ but we’ve been poorly informed”
Citizens aired their concerns…
“Monstrous, colossal, shocking”
Property values “will plummet … if turbines are erected”
“I’m not against ‘green energy,’ but we’ve been poorly informed”
Citizens aired their concerns…
Livingston caught completely off-guard!
Joe Thomas, new Mayor
Spanish Fork wind project – his first order of business!
Mayor Thomas asks residents to:
“Open your mind up and let one word in … think – options!”
• Appoints a three-member resident board
Joe Thomas, new Mayor
Spanish Fork wind project – his first order of business!
Mayor Thomas asks residents to:
“Open your mind up and let one word in … think – options!”
• Appoints a three-member resident representative board
March 2006, compromise reached – wind park to move up the canyon !
City had to annex new project location
New land leases had to be signed
Water well issue had to be approved
New compromise plan
Time delay cost Wasatch Wind an additional $300,000 , but …
The process brought greater trust between Wasatch Wind and the residents of Spanish Fork
Outcomes of compromise
In 2006, legislature fails to renew the sales tax credit
Legislature eventually renewed the credit in 2007… however…
Fourth Hurdle: Re-negotiating with Investors
Falling dollar drives up costs (increased 17% in 2006 and another 14% in 2007)
Turbine shortage due to booming growth – 18 month back-order (imported from outside U.S.)
Turbine shortage/increased production costs in 2007
Spanish Fork offers 70 percent property tax reduction
“We’re going to rebate something we never would have gotten in our lives, and we get to keep a big chunk of it, so it was a no-brainer.”
Mayor Joe Thomas
Turbine shortage/increased production costs in 2007
Takes over project
Tracy Livingston and Wasatch Wind continue to be advisors
Edison Mission Energy has turbines!
Spanish Fork Sky Spectacular
September 2008
Outreach and engagement – policymakers and citizens within the “view shed” of the project
Lessons learned
Outreach and engagement – policymakers and citizens within the “view shed” of the project
Build relationships with local champions – Dean Davis, Mayor Joe Thomas, ex-foes
Lessons learned
Outreach and engagement – policymakers and citizens within the “view shed” of the project
Build relationships with local champions – Dean Davis, Mayor Joe Thomas, ex-foes
Explore compromises
Lessons learned
Outreach and engagement – policymakers and citizens within the “view shed” of the project
Build relationships with local champions – Dean Davis, Mayor Joe Thomas
Explore compromises
Persistence
Lessons learned
Construction◦ $4 million in economic output during construction◦ Supported 38 jobs, totaling $1.4 million
Operations in 2009◦ $74,000 land lease payments ◦ $112,000 local property taxes*◦ $84,000 for Nebo School District*◦ Supports 7 jobs total (2 on-site)◦ $576,000 in economic output
* Reflect 70% revenue reduction incentive
Economic outcomes(Reategui, Stafford and Hartman 2009)
Center for the Market Diffusion of Renewable Energy and Clean Technology
Energy
Transportation
Buildings
Marketing & Public Policy
Cathy L. HartmanEdwin R. Stafford
