Element Power: Updates Locals on McDonough Co Project

From the McDonough County Voice:

Element Power held two meetings in Macomb on Tuesday to explain why the McDonough County area does not have wind farms yet and still may not have them for a while longer.

A meeting was held in the morning for public officials and members of the Macomb Area Chamber of Commerce and of the Macomb Area Economic Development Corporation. The evening meeting was held for landowners who signed contracts to allow the location of wind turbines on their properties.

Project manager Scott Koziar said there are 24,000 acres committed. He said the company needs a minimum of 16,400 acres to accommodate 116 turbines.

Koziar said the Cardinal Point Wind Energy Project has come a long way since Element Power took it over from EcoEnergy in 2010. But he said major tasks ahead include completion of federally-required environmental studies, selection of the type of turbines to be used, geotechnical testing of each turbine site, and advance sales of wind power.

The project manager said there are challenges on both the national and state levels. Koziar said there is a slow market due to the bad economy, there’s been flat or negative growth in electricity loads, and there’s now a record low in natural gas prices.

Dave Stoner, senior vice-president for Element Power’s projects east of the Mississippi River, said, “The energy market runs in cycles, with boom and bust years.”

Koziar said his company has enough faith in Cardinal Point that it has committed funds to cover increased, and in some cases non-refundable, fees for a place on the Midwest Independent System Operator power grid.

“We’ve paid our fees and I think some other companies may drop out and give us better position,” said Koziar. He said it’s imperative that the U.S. Congress renew the federal production tax credit that provides incentives for the first 10 years of a wind farm operation.

Kim Pierce, MAEDCO executive director, said her office has been in touch with local governments to get resolutions of support approved. “We may be coming back to you with more specific requests as bills become identified,” Stoner responded.

Koziar said a problem at the state level is that the Illinois Power Authority is currently interested in only approving power purchase agreements for one to five years. He said those who might buy wind power are more interested in 20-year agreements.

The project manager said his company may ask local landowners to join it in lobbying for a change in state policy. “Our industry needs to do a better job of breaking down details for legislators on why the 20-year contracts are needed,” said Koziar.

“We believe in this project,” Stoner said. “We’ve worked on it for three years already but a long timetable is typical for such projects. We’re extremely confident in wind power as an affordable energy source.”

Element Power is working on wind farms in 18 states and on solar energy in 17 states. Its national headquarters is in Portland, Ore. Stoner’s office is in Virginia, Koziar’s office is in Minneapolis, and the company maintains an office in Macomb.

The McDonough County project would provide more than 300 construction jobs and 12 to 16 permanent jobs handling the wind farms. Element Power estimates the finished project would make $1.8 million in local property tax payments, with more than $1 million going to the West Prairie School District.

In terms of power sales, Koziar said Ameren is the largest customer target. But he said several smaller buyers would be contacted and that his company is looking outside the Illinois market for customers.

FERC Approves Rock Island Clean Line Transmission Project

A major milestone has been achieved in the development of the transmission line project to move wind energy from Iowa to Illinois and points east, an action that will allow the project's developer, Clean Line Energy Partners to begin negotiations with transmission line customers.

From a Press Release from Clean Line:

HOUSTON (May 23, 2012) – Rock Island Clean Line LLC (Clean Line) has obtained a key regulatory approval from the Federal Energy Regulatory Commission (FERC) to begin negotiating transmission service agreements with potential customers of the Rock Island Clean Line transmission project, likely load serving entities or wind developers.

The Rock Island Clean Line is a 500-mile overhead high voltage direct current (HVDC) transmission line that will run from northwest Iowa to an area near Morris, Illinois. The project will deliver 3,500 megawatts of the best wind energy resources in Iowa, Nebraska, South Dakota and Minnesota to communities in Illinois and other states to the east, areas that have a strong demand for clean, reliable energy.

The FERC order was issued in response to the application filed by Clean Line in November 2011. Receiving this authority permits Clean Line to subscribe up to 75% of the line’s capacity with anchor tenant customers and sell the remaining capacity through an open season process. The anchor tenants will receive guaranteed capacity outside of the open season process; however, the same terms and pricing will be offered in the open season.

“The Rock Island Clean Line project will create good-paying labor jobs for Illinois families, help reduce rates for Illinois electricity consumers by providing more choices and provide clean home-grown renewable energy to support our environment,” said Illinois Governor Pat Quinn. “The approval from FERC is a positive step forward for this project.”

In its application, Clean Line addressed the following standards: the justness and reasonableness of rates; the potential for undue discrimination; the potential for undue preference, including affiliate preference; and regional reliability and operational efficiency requirements. Clean Line also described why granting its request will be in the public interest.

Iowa Governor Terry Branstad said in response to the favorable FERC ruling, “The Rock Island Clean Line project has the potential to bring billions of dollars of new investment to Iowa and createthousands of jobs. I’m therefore pleased to see this approval by the Federal Energy Regulatory Commission.”

Clean Line has conducted over 600 one-on-one meetings with stakeholders, has hosted 33 open house meetings to which over 40,000 landowners were invited to submit feedback on routing options, and has held additional open houses in Illinois to introduce local businesses and labor groups to the Rock Island Clean Line project. Substantial progress on engineering and design of the project has been made since its inception in early 2010. In June of 2011, Clean Line signed an agreement with Siemens to provide HVDC technology solutions for the Rock Island Clean Line. Under that agreement, Siemens and Clean Line are working together to develop, design, and implement the HVDC converter stations for this important infrastructure project. In the summer of 2011, Clean Line acquired 2007-vintage interconnection queue positions that are advancing through the regional merchant transmission study process. These queue positions will greatly accelerate the interconnection process for the Rock Island Clean Line.

“This approval marks an important step forward in the steady progress of our Rock Island Clean Line project, which will bring considerable benefits to the existing grid by delivering low-cost clean wind power from northwest Iowa and the surrounding region to Illinois and states to the east," said Michael Skelly, President of Clean Line Energy. "We thank the FERC commissioners and staff for their diligence and consideration given to our application. We look forward to continuing to create opportunities for new jobs, low-cost clean energy and significant investment in Iowa and Illinois.”

Developing a project of this scale is a long-term undertaking; the approximately $1.7 billion project is expected to achieve commercial operation in 2016 or 2017. For more information about the Rock Island Clean Line, please visit www.rockislandcleanline.com.

Crain's Profiles Rock Island Clean Line Transmission Project

Crain's Chicago Business ran an excellent piece today on Clean Line Energy Partners' Rock Island transmission project, including a look at the company's Hans Detwiler, a long-time player in Illinois political and energy circles who is now managing the project's development. From the Crain's article:

For most of his 20-year career, Hans Detweiler lobbied state and federal officials to boost wind farms in the Midwest, but a couple of years ago he concluded he could make a bigger impact as a businessman than as a policy advocate.

The former lobbyist for both the Chicago-based Environmental Law and Policy Center and the American Wind Energy Association in Washington is championing a multiyear effort to build a $1.7 billion, 500-mile high-voltage power line to connect northwest Iowa, one of the windiest spots in the U.S., to Chicago, the Midwest's biggest energy consumer.

If he's successful—and the hurdle is mighty high—the 42-year-old with a political science degree from Grinnell College in Iowa will accomplish two tasks: He will make the composition of Chicago's electricity cleaner while lowering local electric bills.

The promise for Iowa farmers and Chicago-area consumers alike is up to 4,000 megawatts of wind energy funneled into and through the Chicago area. That's double the amount from farms developed in Illinois over the past decade, most coming after the 2007 enactment of a state law pushed by Mr. Detweiler and others requiring utilities to purchase an escalating percentage of renewable energy.

“We're very comfortable the project will occur,” Mr. Detweiler says. “We think the stars align in 2017.”

But the proposed Rock Island Clean Line won't go anywhere unless he can secure enough customers upfront. Unlike most transmission lines, which are built only after regulators agree to force ratepayers to finance them through higher electric bills, Clean Line is a “merchant” project, which means it would be privately financed.

In the Midwest and mid-Atlantic power grid traversing all or parts of 13 states, including northern Illinois, just two transmission lines have been built using this financing method, both of them in northern New Jersey, according to a power grid spokesman.

Also, today's rock-bottom wholesale power prices, in the low $30s per megawatt-hour, are too low to make the project economic. Mr. Detweiler expects that in five years, when he hopes the line will be built, prices will be modestly higher. He says, given how strong the wind blows in northwest Iowa, $45 per megawatt-hour would be sufficient.

ON THE ROAD

For now, Mr. Detweiler, the project's director of development, is earning upgrades from his frequent car rentals to drive from his home in Chicago to Iowa and parts of Illinois. Since he began promoting the project in January 2010, he figures he has presided over or attended more than 600 meetings. “We've served several thousand pulled-pork sandwiches,” he jokes.

The line, one of four transmission lines around the country being pursued by Houston-based Clean Line Energy Partners, needs approval from Iowa and Illinois regulators, who must endorse its path, and federal regulators, who must give permission to the developer to negotiate rates with end-use customers. A federal decision is expected soon, but the state rulings will take as long as two years.

The high-voltage power cord would originate in O'Brien County, Iowa, about 200 miles northwest of Des Moines. Locals want it, says Rodd Holtkamp, vice president of Savings Bank in [...] Iowa, which lends to the farmers in the area. "We're sitting in some of the best wind resources in the entire U.S.," he says. "We can build these turbines, but we can't get on the grid and get the juice out of here."

Clean Line would harm the financial interests of Illinois' biggest power generator, Chicago-based Exelon Corp., whose profit margins would suffer at its six nuclear plants in the state from lower prices here. Exelon is proposing a transmission line of its own, the $1.6 billion, 420-mile Rite Line, which would connect Chicago's power grid to the East, where power prices are higher. But, unlike Clean Line, Exelon is seeking federal approval to finance the project through electric bills.

In a statement, Exelon doesn't say it supports or opposes Clean Line but makes clear its misgivings: “Illinois already benefits from an oversupply of inexpensive power. . . . We believe any additional power coming into Illinois from planned wind projects in the upper Midwest can and should be moved eastward for reliability reasons, which will not unduly impact Illinois power prices.”

In the meantime, Mr. Detweiler is winning support from other quarters. On May 8, Grundy County struck a deal with Clean Line under which the developer will pay about $2.8 million over 20 years in lieu of property taxes, the same arrangement Iowa requires of transmission developers but Illinois does not. Grundy County would be the line's eastern terminus, about 65 miles southwest of the Loop.

Clean Line HVDC Substation Could be Built in Channahon

The easternmost substation for the Clean Line's proposed 500-mile high-voltage DC Rock Island transmission line may be built in Channahon, Illinois, says an article in the Herald-News:

Wind energy harvested from some blustery western states will be routed through Morris and Channahon substations and converter stations if Houston-based Clean Line Energy Partners’ plans go through.

A representative of the firm explained the concept to the Channahon Village Board this week.

The “Rock Island Clean Line” would begin in several wind farms in South Dakota, Minnesota, Nebraska and Iowa, which are four of the windiest states in the country, and be carried first to a newly constructed converter station in western Channahon. The firm is eyeing an 85-acre site off Bungalow Road.

The electricity would then run to Collins Station in Morris, which would act as a substation. Construction in Channahon could employ a large number of workers, the trustees were told, and could begin as soon as 2014. The system could be up and running by late 2016.

Trustees were asked to issue a letter of recommendation for the project, but no decision was given on the letter at this week’s meeting.

The entire project would be privately financed, the board was told, using direct current, which is more efficient than transporting alternating current. DC also leaves a much smaller environmental footprint than AC, the representative said, and has better reliability. The farms would produce as much as 3,500 megawatts of energy.

Trustees were optimistic about the number of labor jobs the construction would generate, albeit The M&E tax taxes heavy industrial machinery and equipment as real property. The state’s other 101 counties classify machinery and equipment as personal property, which is not taxed in Illinois.

Also this week, Channahon’s Finance Director Bob Guess told the board that Pace Dial-a-Ride will begin doubling its hours of service to try to meet the needs of more Channahon residents. Too many people are being turned down lately, Guess said, because of the limited hours.

The hours will be increased for the months of May and June in order to see if the change meets the needs of more riders.

Invenergy Closes Debt Financing on 200MW Vermillion Co Project

From an Invenergy Press Release:

CHICAGO, IL - (April 30, 2012) – Invenergy Wind LLC (“Invenergy”) announced today that it has closed debt financing for its 200 MW California Ridge Wind Energy (“California Ridge”) project, which currently is under construction in central Illinois.

The financing included construction, bridge and term loans and a letter of credit facility.  The 

financing was allocated across a bank tranche and an institutional tranche.  

Santander/Sovereign Bank acted as Lead Arranger and Global Coordinator.  Rabobank was 

Syndication Agent and Letter of Credit Issuer.  Union Bank, RBC Capital Markets, and Lloyds 

were Co-Documentation Agents.  Prudential Capital Group led the Institutional tranche of the  facility, and acted as Structuring and Documentation Advisor.  Allstate also participated in the Institutional Tranche.

“Invenergy is proud to complete financing for the  seventh wind project we are building in our home state,” said Jim Murphy, Chief Financial Officer and Chief Operating Officer of Chicagobased Invenergy.  “This financing utilized a blend of bank and institutional sources to provide both flexibility and tenor.”

California Ridge is located northwest of Danville, Illinois, in Champaign and Vermilion Counties.  Upon its scheduled completion later this year, the project will feature 134 General Electric 1.6 MW wind turbines and generate enough energy to power approximately 65,000 homes. Energy produced from California Ridge will be purchased by the Tennessee Valley Authority through a long-term power purchase agreement.

The wind turbines utilize GE’s latest technology, including 100 meter rotor diameters and 100 meter towers.  White Construction is responsible for the turbine erection and other balance of plant work.  Henkels & McCoy will be responsible for the construction of  the project’s transmission line and substation.  GE will provide certain construction management services for the substation work.  The project will be operated by Invenergy Services LLC.  

About Invenergy

Invenergy and its affiliated companies develop, own and operate large-scale renewable and other clean energy generation facilities in North America and Europe. Invenergy is committed to clean power alternatives and continued innovation in electricity generation. Invenergy's home office is located in Chicago with regional development offices located throughout the United States, Canada, and Europe.

As the nation's largest independent wind power generation company, Invenergy and its affiliated companies currently have over 6,600 MW of wind, solar and thermal projects under contract, in construction or in operation. For more information, please visit www.invenergyllc.com.

Contact: Alissa Krinsky

Director of Communications

312-582-1554 or akrinsky@invenergyllc.com

Vermillion Co Board Approves GDF Suez Wind Farm Proposal

From an article in the Danville Commercial-News:

At Tuesday’s board meeting, the county’s second wind farm successfully passed despite opposition from some board members.

Representatives from GDF SUEZ Energy North America Inc. attended the meeting to answer questions from board members prior to the board vote. The permit for the project was first scheduled for vote at the county board’s February meeting, but was postponed with company representatives were unable to attend.

John Givens, development manager for the Hoopeston Wind Project, answered questions from board members.

The project calls for the construction of 43 wind turbines along a stretch from around 3 miles east of Illinois Route 49 to the area near the Hubbard Trail Country Club north of Rossville.

Development of the Hoopeston Wind Energy Farm has been ongoing since 2008. Prior to being dropped from February’s agenda, the timetable called for it to be completed by 2014.

Among the board members to vote against permit approval for the wind farm was Green. Green said in February he would consider the company’s permit incomplete unless it had obtained a Natural Resource Information report.

On Tuesday, he thanked Givens for his attention to the report, but still refused to support the permit for the project, referring to his stance simply as a “vote of conscience.”

In addition to Green, two other board members voted against the permit: Terry Stal of District 4 and Mike Marron of District 2. Marron also expressed appreciation for the company including information on drainage laws in its application.

But he also said not all property owners in the large swath of land covered by the wind farm were supportive of the project, contending it was a 50-50 split between supporters and non-supporters.

Givens told board members during the meeting the company is in discussions with utilities to purchase the energy produced by the wind farm once the turbines are erected and functioning.

The wind turbine project is the second to be approved in Vermilion County. A permit for Invenergy LLC’s California Ridge project was approved in July. Preliminary work on that project began late last year.

Ambiguous State Zoning Law Could Cause Dispute in Whiteside Co

An ambiguity in state law is causing a disagreement in Whiteside County, with tiny Deer Grove claiming it has the power to regulate wind turbines outside the town, and one wind developer claiming the regulation of those unincorporated county lands rests with the county. According to an article from Sauk Valley Media:

Deer Grove’s village board believes it can regulate wind turbines within 1.5 miles of its boundaries.

But a wind energy company disagrees. It is planning two of its nine turbines within the 1.5-mile area, and it’s not seeking the village’s approval.

On Wednesday, the Whiteside County Planning and Zoning Commission continued its ongoing hearing for Ireland-based Mainstream Renewable Power’s proposal to build nine turbines in the far southeastern part of the county.

More than 80 people attended Wednesday’s session, including 17 of the 27 County Board members, who will make the final decision.

Late last year, Deer Grove, population 48, passed a zoning ordinance, which officials said was legally required before the village could regulate activities in the 1.5-mile area.

During Wednesday’s testimony, John Martin, Mainstream’s project manager, said the village’s zoning ordinance didn’t meet the “regulatory requirements” to keep out turbines. He didn’t provide details.

At issue is a 2007 state law that gives municipalities the power to regulate wind turbines within 1.5 miles of their "zoning jurisdiction." However, towns like Deer Grove (population 48) have no zoning code, and therefore have no legal right to zone wind turbines. The Village disagrees. Developers argue that towns like Deer Grove DO have the power to regulate wind turbines, by passing a zoning code.

Allowing Deer Grove to regulate wind turbines without a zoning code presents a host of problems. Namely, that it allows a town to control land use outside its boundaries, even though it has chosen NOT to control land use inside its boundaries (by establishing a zoning code). Plus, it would only apply to wind energy. Allowing a municipality to control a single type of land use is also a slippery slope, as it sets a precedent where all sorts of land uses can be singled out.

Further, it sets up the potential for conflict between counties and municipalities, who may have conflicting regulations for unincorporated county lands that lie within the 1.5 mile radius. Watch for the issue to heat up in Whiteside and other counties as wind development moves forward in the state.