Liberty wind projects analyzed; Community-owned electricity generation
December 19, 2012 —
There are a couple of large hurdles with the wind projects that are proposed for the Town of Liberty. For one of the projects the estimated cost is $5.3 million, which is a figure that will surely put up an immediate red flag, as county legislators struggle with a double-digit tax increase for 2012.
But at a presentation of the projects at the Liberty Senior Center on December 14, members of the company Sustainable Energy Developments (SED) explained how the projects could be structured in such a way as to benefit the county.
One prospect envisions a two-megawatt wind turbine located on county-owned land, which would provide electricity to the Human Services Complex on Sunset Lake Road, several hundred feet from the proposed site.
According to Loren Pruskowski, chief financial officer and co-founder, the total installed cost has been calculated at $5.3 million, and the revenue generated from the value of electricity would be $550,000, which is enough to power about 400 homes annually. The county could finance it with what is called a “clean renewable energy bond,” which is supposed to carry a 0% interest rate, but with various fees actually comes with a rate in the neighborhood of 1%. At that rate, if a bond could be set for 15 years, the project could be “cash-flow positive,” Pruskowski said.
The other way to structure the project involves finding a company to own the wind turbine and sell the electricity to the county. As a nonprofit organization, the county can’t take advantage of the tax credits that come with alternative energy projects, but a private company can. Assuming that the federal government renews wind-tax credits, which at the moment are scheduled to expire at the end of the year, a for-profit company might be interested in building the wind project, and taking advantage of the tax credits, and selling the wind turbine back to the county once all of the tax credits expire.
Typically wind turbines have a life of 20 or 25 years but, actually, most parts of the project, except for the guts of the turbine itself, have a life that is closer to 50 years.