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Wind company still looking for money; Energy market down, but developer optimistic about plans

Without investors or a final plan, Highland New Wind Development nevertheless remains optimistic about getting Virginia's first wind energy utility built here in Highland County. HNWD attorney John Flora told county supervisors Tuesday the market for wind energy is down, but the company is proceeding with its plans. ...Because HNWD does not know which kind of turbines it will use, it has not submitted a final site plan, something both the county and state require. Supervisor David Blanchard wondered why the company had not at least put together several site plans based on the options for turbines.

Without investors or a final plan, Highland New Wind Development nevertheless remains optimistic about getting Virginia's first wind energy utility built here in Highland County.

HNWD attorney John Flora told county supervisors Tuesday the market for wind energy is down, but the company is proceeding with its plans. "A number of things have changed in the marketplace since I was here last - some for the better, some for the worse," he said.

No investors, yet

Flora said after HNWD went to Texas last summer, it had two letters of intent from investors. In August, he said, one company changed its mind. "They ran the numbers and said they could do better in Texas and in the Midwest," Flora said. "Our wind is just as good as what they have, but ours slows down in July and August, so they have two months' advantage."

Flora said wind utilities on the East Coast require a heavier investment. "There is a lot more upfront money (needed) in an eastern project than a western project, and we told that to the (State Corporation Commission)" he noted.

In September, HNWD turned to its second choice of investors. "We were ready to sign that one, and they called and said they had a board meeting - this is... more [truncated due to possible copyright]  

Without investors or a final plan, Highland New Wind Development nevertheless remains optimistic about getting Virginia's first wind energy utility built here in Highland County.

HNWD attorney John Flora told county supervisors Tuesday the market for wind energy is down, but the company is proceeding with its plans. "A number of things have changed in the marketplace since I was here last - some for the better, some for the worse," he said.

No investors, yet

Flora said after HNWD went to Texas last summer, it had two letters of intent from investors. In August, he said, one company changed its mind. "They ran the numbers and said they could do better in Texas and in the Midwest," Flora said. "Our wind is just as good as what they have, but ours slows down in July and August, so they have two months' advantage."

Flora said wind utilities on the East Coast require a heavier investment. "There is a lot more upfront money (needed) in an eastern project than a western project, and we told that to the (State Corporation Commission)" he noted.

In September, HNWD turned to its second choice of investors. "We were ready to sign that one, and they called and said they had a board meeting - this is a public company and their stock was down significantly - and they decided to stop all capital expenditures and buy back their stock," Flora explained.

"It is a tougher market," he added. "There are fewer players, there is no question about that, but it is certainly not true that it is dried up and no one is talking to us. We are still getting calls. In the renewable energy world, we are still in the best sector."

Wind energy is still the better choice among renewable power options including solar, biomass, and ethanol, Flora said.

"We are not giving up and we are still optimistic. We still want to have something done this year.

It is just taking longer than we had hoped," he said. "Good news is, that contrary to what I said last time, turbine availability is much easier because there are a lot of people who have slowed down or shut down their projects. We can get almost what we want, but the pricing hasn't adjusted as much as it needs to."

Supervisor Robin Sullenberger told Flora he was getting a lot of questions about the fate of HNWD's project. "There is seldom a day that goes by that I don't get some kind of communication about the status of this project, and wind projects in general," Sullenberger said.

"I guess the only thing I would say to you is that, as you well know, timing is everything. And one of the things that is happening here, as this extends over a longer period of time, is that it is reenergizing the opposition ... There are more and more skeptics who seem to feel that this is potentially not even doable."

"And as you know, that is far from the truth," Flora replied. "I am sorry that we do not have a business partner."

"I understand what your issues are, but business realities and perceptions are often widely divergent," Sullenberger added.

"It is a finance issue. It is not the technology, it is not the permits," Flora stressed. "We are not running into problems with that. It is just that there is a little less money right now ... it is getting better every day, but there is less money chasing deals and we have to wait in line because we are not the best deal in the market. We are a good deal, but for some players, we are not the best deal."

"The way the market is, I can understand why you lost investors," said supervisor Jerry Rexrode.

No site plan, yet

Because HNWD does not know which kind of turbines it will use, it has not submitted a final site plan, something both the county and state require.

Supervisor David Blanchard wondered why the company had not at least put together several site plans based on the options for turbines.

"It seems that other agencies would like to have a site plan also," he said, "and with the length (of time) and the resources that you all have had ... it seems as though, with the time you all have been working on this project, that there would be potentially several site plans which could be developed, depending on the type of turbines, and when it came time for the turbines to be available, you all could overlay those plans."

Blanchard attended a meeting between HNWD owner H.T. "Mac" McBride and officials from the Department of Historic Resources last month.

"In the conversations with the Department of Historic Resources, it seems they are looking for some sort of idea of where these turbines might be sited within certain parameters," Blanchard said.

"Until the market changed, what you need to understand, is that we couldn't get any European turbines," Flora responded.
DHR asked for a site plan, a view shed study, and an archaeological survey, among other things.

DHR officials have indicated since the meeting with McBride that they will refine their requirements.

One of the historic resources DHR is concerned about is Camp Allegheny, a Civil War battlefield near the project site, located just over the state line in West Virginia.

Flora said he spoke by phone with DHR director Kathleen Kilpatrick after the meeting. "I think we can work something out that will be satisfactory to everybody," he told supervisors.

HNWD has looked at variations on its original plans, which depend on whether it can secure 2.5-megawatt turbines, or 1.5-megawatt turbines. If the company can get the larger ones, fewer would be needed. If it must purchase smaller ones, more towers will be required.

"What I call plan C - the back up - is that we can get 1.5 (MW) GE (turbines) - they are everywhere - or 1.5 from China, which are cheaper," Flora said, though he added that smaller turbines were not HNWD's preference.

"But would there be a lot more units," Sullenberger said.

"Absolutely," Flora agreed. "That is my full 22."

According to the conditional use permit, HNWD is not allowed to build more than 22 turbine towers.

"Another back up plan that I personally do not like, and I know my client does not personally like ... maybe there are some economies of scale of pulling it back to a 20-megawatt project,"

Flora added. "We could pull it down and maybe do only one of the ridges ... I don't know that I want to go back to the SCC, so to me, if we do that, that means we have exhausted all other opportunities ... and we would have to start over."

But, Flora said, "I don't want you to believe we are not going to do both ridges, if we did, we are done with this DHR stuff as far as their main concern, which is a West Virginia facility, and quite frankly as a lawyer, I'm not sure that is jurisdictional for them, but we are working with them."

Rexrode wasn't surprised by the time it was taking for the company to get started. "You have a big job ahead of you," he said. "As a board member, and being in the construction business, I realize it is a sizable project ... to get a permit, it takes extraordinary time. I know what it takes for us to get a permit to widen a little bridge and I can imagine what you all are going through ...

I understand why you are not doing a site plan. I firmly understand that it takes time and money to do all of that."

Erosion plan on hold

County officials discussed the status of HNWD's erosion and sediment control plan, one of the essential pieces toward getting a building permit.

County attorney Melissa Dowd explained the E&S plan had not been approved by the county because there was no site plan, yet. She thought a letter from building official Jim Whitelaw had been sent to HNWD or its engineering firm explaining that.

"If that doesn't ring a bell then I think we need to check on this, because I know David (Blanchard, supervisor) and I both discussed with Jim the E&S plan that was sent. Jim then went to the state folks with what he had been sent, and they recommended, as did I, that it be rejected because it is really hard to approve an E&S plan when there is no site plan."

Contacted by The Recorder Wednesday, Whitelaw said he had not drafted such a letter, but couldn't remember for sure.

"Can we just hold it until we have the site plan?" Flora asked Dowd.

"It is impossible to approve it without a site plan, basically, under the current statutes for E&S requirements," Dowd replied, adding there was nothing wrong with the plan, but it was "premature."

McBride asked supervisors to take a look again at the narrative attached to the E&S plan. "It explains a lot of things that none of us have explained to you about not only the site plan, but that what this is, is a portion of the site ... It tells you when the turbines are picked, where the silt fences will go on the low sides, all the dimensions and the water that goes where," he said.

"But it doesn't show the site," Dowd said. "As I understand, based on the slope and all kinds of things, the E&S requirements can change, and that is why it was difficult for us to say we could approve anything without it being complete ... I did not study the site plan (but) I looked at enough, and talked to Jim about it enough, to say it is premature to approve it."

"It is not meant to be the site plan," McBride replied. "It is meant to be the erosion plan." He asked that supervisors study it again.

Blanchard said Wednesday that the board is prepared to have engineers review HNWD's partial E&S plan, but would withhold approval until a final site plan is ready.

Time running down

HNWD's county permit expires in about 10 months if the utility is not under construction, although supervisors have the authority to extend it beyond its two-year deadline. The state permit also had a two-year window, and will expire in December 2009 if the project hasn't begun unless the SCC extends that deadline.

"I do think that it's in the best interest of the county and HNWD to work together to get the permits you need in a timely fashion," Rexrode told HNWD. "I don't know how we can tell anyone down in Richmond to expedite things that would work."

Flora said, "I don't want to go down there (Richmond) with just us again. I want to bring the expert who builds the turbines and sites them and have them talk to whoever is interested."

"Once you pick them (turbines), what are you looking at - no more than 30 says to get a site and get back to us?" Rexrode asked.

Flora said HNWD wants to have its ducks in a row by the end of the year, "and you would have your site plan in front of you still before the end of the year," he told Rexrode.

Rexrode said the project's construction from start to finish should only take 6-8 months. "A lot of people don't realize that they are just a big concrete pad with a stem and a motor sitting on top of it," he said.

"And putting them up on a day that is not too windy," Flora added.

"All I can tell you is that we have done - and still are always doing - everything we can to get you that building permit by the end of the year. I have not given up, even though this is Nov.4 ...

The tough part is picking the turbine and the right investor," he said.

Permit requirements

Flora told the board that of nine state requirements the company believes it must meet, only three are left to handle - a permit from the Federal Aviation Administration, a building permit from the county, and an open burning permit, which HNWD says it probably won't need.

HNWD cannot apply for an FAA permit until it has determined where the 400-foot towers will go, nor apply for a building permit until it has investors and turbine equipment, Flora said.

Flora did not indicate whether HNWD planned to meet all the other approvals the state and county stipulated it must in order to proceed with construction. The SCC permit conditions require the company to work with other state and federal agencies on issues like view shed, historic resources, and environmental effects.

Flora said HNWD has signed an interconnection agreement with Allegheny Power "so that HNWD is committed to spending $1.2 million on (the) substation and interconnection improvements and that has not commenced yet, that will happen in the springtime ... I will know, quite frankly, a lot more tomorrow. Jeff Paulson, our Minnesota adviser, is talking to
Allegheny Power tomorrow about when exactly they want to get started, and I'm assuming they will want to do some survey work this year and plan to do most of that work this spring and scheduled to be operational next fall."

Wednesday, Blanchard said he's still unsure about how things will shake out, but hopes the county will be given enough time to review HNWD's plans. "That's going to be the easiest way for the board, Highland New Wind, and other agencies - to give us time to sit down and work out the details to make sure all the T's are crossed and I's dotted. If it doesn't happen that way, that's a bridge will have to cross when we come to it. The closer we get to deadline, the more we'll start talking about it as a board collectively. Certain things will come up where we'll have to talk about it sooner or later, where we'll have to start talking about extending the permit, and addressing it from there."

Blanchard said the exact expiration date on the conditional use permit has not been nailed down yet, but he hopes HNWD would give the county and Highland citizens enough time to review its information before then. And, Blanchard said citizens would be invited to contribute their own opinions on that information. "I don't' see why we wouldn't (give the public time to participate). I would imagine there are certain things that are public information and there shouldn't be any barriers to that. My objective is to work with the developer, work with the county, and if everything falls into place, make it a good project where both county and the developer can be happy with the results," he said.


Source: http://www.therecorderonlin...

NOV 6 2008
http://www.windaction.org/posts/17861-wind-company-still-looking-for-money-energy-market-down-but-developer-optimistic-about-plans
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