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Wind agency investment proves costly to Ames

Since the city joined the 15-municipality agency in October 2008, Ames has paid more than $197,000 toward feasibility studies for a yet-to-be-developed wind farm near Ridgeport in Boone County. Assistant City Manager Sheila Lundt said staff "cringe" at paying about $56,000 more to IAMWind to exit from the agency, but "We just don't want any more financial entanglements than we already have."

The Ames City Council cut its losses Tuesday on a nearly $300,000 investment in the Iowa Agency for Municipal Wind.

Since the city joined the 15-municipality agency in October 2008, Ames has paid more than $197,000 toward feasibility studies for a yet-to-be-developed wind farm near Ridgeport in Boone County.

Assistant City Manager Sheila Lundt said staff "cringe" at paying about $56,000 more to IAMWind to exit from the agency, but "We just don't want any more financial entanglements than we already have."

The council unanimously approved the final payment, representative of its remaining obligations, in an agreement that will allow it to leave IAMWind without one year of notice.

The council voted in August 2009 to leave IAMWind after arranging to purchase 36 megawatts of wind power from NextEra Energy, a Florida-based company with wind farms in Story County, to meet the council's goal of supplying 10 percent of its energy from renewable resources by 2015.

"Something that started as a shovel-ready project has turned into something I can honestly say I don't know if it ever will happen," said Donald Kom, director of Ames' electric utility and the city's... more [truncated due to possible copyright]  

The Ames City Council cut its losses Tuesday on a nearly $300,000 investment in the Iowa Agency for Municipal Wind.

Since the city joined the 15-municipality agency in October 2008, Ames has paid more than $197,000 toward feasibility studies for a yet-to-be-developed wind farm near Ridgeport in Boone County.

Assistant City Manager Sheila Lundt said staff "cringe" at paying about $56,000 more to IAMWind to exit from the agency, but "We just don't want any more financial entanglements than we already have."

The council unanimously approved the final payment, representative of its remaining obligations, in an agreement that will allow it to leave IAMWind without one year of notice.

The council voted in August 2009 to leave IAMWind after arranging to purchase 36 megawatts of wind power from NextEra Energy, a Florida-based company with wind farms in Story County, to meet the council's goal of supplying 10 percent of its energy from renewable resources by 2015.

"Something that started as a shovel-ready project has turned into something I can honestly say I don't know if it ever will happen," said Donald Kom, director of Ames' electric utility and the city's representative to IAMWind.

Lundt said the lending crisis shifted the initiative from a private development to an effort led by municipalities.

"They're continuing with wanting to move ahead with aspects of it that move beyond" studies that Ames agreed to help fund, Kom said.

If that happens, cities will have to incur debt for the agency, including portions of costs to study and construct $5.5 million in improvements to the electrical grid to handle the increased load.

Lundt said Ames had "no anticipation of debt accumulation," but would be responsible for any added expenses if it waited out the year to leave the agency.

Marek said the city would likely still have to pay the $56,000 at the end of the year, but risks the amount will increase "when we're not running the outcome of the board."

Ward 2 Councilman Jami Larson said Ames expected to be one of the largest purchasers of wind farm capacity, and staff heavily invested time into the agency at the city's expense. Yet, he said, IAMWind never responded to the city's request to require unanimous board decisions, allowing bands of smaller partners to affect decisions that could be detrimental to Ames.

"There's been a lot of misrepresentation on this whole thing," he said.

City staff warned the council in October 2008 of many of the pitfalls that have come to bear, Larson said, and now the city, including contributions from Iowa State University, has spent "about $300,000 for nothing."

Lundt said the city has no need or ability to use the 21.7 megawatts of electricity it had sought with IAMWind.

Kom said he could not disclose proprietary price information, but he said estimates for purchasing power from IAMWind were "significantly higher" than the city secured in its 20-year contract with NextEra Energy.

The council also approved the first reading of an unrelated ordinance to allow installation of small wind turbines in industrial and some commercial areas within the city limits. The council said it was uncomfortable extending the ordinance to residential neighborhoods at this time.


Source: http://www.amestrib.com/art...

FEB 24 2010
http://www.windaction.org/posts/24812-wind-agency-investment-proves-costly-to-ames
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