MONTEREY - There were supposed to be 400-foot towers going up by now.
Highland New Wind Development LLC, which has been trying to erect Virginia's first commercial wind energy utility, had announced the facility would be under construction this spring and blades would be spinning by next month to generate electricity.
But all is quiet at the site on Allegheny Mountain. Heavy equipment and construction trailers are no longer parked at HNWD owner Mac McBride's property on Red Oak Knob and Tamarack. Highland residents have been wondering for months what's going on, and this week, supervisor Robin Sullenberger called the company's attorney, John Flora, to find out.
"It was a cordial conversation, but he had nothing new to report," Sullenberger said.
Flora told him there were "ongoing confidential discussions of a proprietary nature" happening behind the scenes. "The implication is that the economy is having an effect ... that's what I'm reading into that," Sullenberger said. "There has not been a complete stoppage related to the project," he added. Flora did not say anything about whether HNWD plans to apply for a federal incidental take permit, Sullenberger said.
This winter, HNWD consulted with representatives from the U.S. Fish and Wildlife Service and Virginia's Department of Game and Inland Fisheries to learn about the process for obtaining an ITP. The permits are issued through the USFWS, and include a habitat conservation plan to protect endangered species and mitigate negative effects on their habitats.
When HNWD got a certificate to build the 39-megawatt plant, the State Corporation Commission did not require the company to get an ITP. The agency did say, however, that not getting one was a business risk. Should any endangered species be harmed during construction or operation, as state agencies predict will happen, HNWD will be subject to fines and enforcement under the Endangered Species Act.
DGIF and USFWS, among others, have for years urged HNWD to obtain an ITP. And for years, the company said it did not need one. But early this year, HNWD said it would, in fact, apply for the federal permit.
According to USFWS and DGIF officials, however, HNWD has yet to apply.
Tylan Dean of the USFWS attended the winter meeting with HNWD representatives. He said he could not determine then whether the company would apply, and as far as he knows now, HNWD has had no further contact with the agency. "We continue to recommend they apply," Dean said this week. "But no, we have not received an application."
Flora, said Sullenberger, did not offer any details about HNWD's plans, but "they understand (an ITP) is one of the components involved.
"I don't feel they are stonewalling," Sullenberger added. "It's just that everything is proprietary at this point."
Citizens and groups who hired the Washington, D.C.-based environmental law firm Meyer Glitzenstein & Crystal are still prepared to file a lawsuit against HNWD and county supervisors if the project proceeds without an ITP. MGC attorney Bill Eubanks said his clients believe if construction begins or the county grants building permits, they will file suit immediately in federal court. Both HNWD and the county were notified of the citizens' intent on May 14; only the county has responded, in a June 17 letter from its attorney Greg Haley, stating they should take up their concerns with the SCC, not the county, since the SCC undertook a detailed analysis of the proposal.
"We have heard no response from Highland New Wind," Eubanks said Wednesday. "It's not clear what's going on on the ground, but that's not going to affect us. We believe they are required to have an ITP before construction."
Eubanks said he had been in touch with the USFWS this week and understood HNWD had not applied for an ITP yet or made further contact with the agency. "In fact, the phrase they used was ‘radio silence.' They haven't heard from Highland New Wind in months," he said.
"It's our take that the Endangered Species Act is not being violated right now, and it would be a waste of everyone's resources to file suit until something happens with the project. But we're ready to go at whatever time something happens, like if a permit is granted by the county or construction commences."
Eubanks said there are any number of reasons why HNWD has not responded to the citizens' notice of intent to sue. The company might decide to wait a year or two on construction, he said.
"They might be having problems finding investors," he added, suggesting HNWD could decide to hold off on the expensive process of getting a habitat conservation plan until it knows for sure whether it will ever be able to build. "Either way, we'll have sufficient time to file a complaint," he said. "The ball's in their court." Rick Webb of Mustoe, one of the citizens represented by Eubanks, agreed. "We're prepared to file a complaint on a minute's notice," he said this week. "Right now, there are enough obstacles to the project, with building permits, bonds, stormwater pollution plans, that unless HNWD chooses to defy any of those things, we'll have time."
Citizens following the project's progression believe HNWD is unable to find financial investors for the $80 million facility, and wonder whether the company will try to avoid the stringent conditions attached to its state permit by finding a way to re-apply for approval under new "permit by rule" regulations. Last year, legislation passed which puts the permitting process for wind plants generating 100 megawatts or less into the hands of the Department of Environmental Quality instead of the SCC. The process is still being developed by a committee that spent a year on proposed regulations. The current draft is in under a public comment period, and those regulations are not final, but they would speed up the permitting process considerably.
However, the language in the new law specifically says companies that have already gotten SCC approval in a final order cannot re-apply for a permit under DEQ's process. It says the new provisions in the law "shall not apply to any small renewable energy project that has applied for or been granted approval by the (SCC) prior to the effective date of regulations promulgated by the (DEQ) as set forth in this act."
When the legislation passed, HNWD was the only company that language would affect. According to the Lynchburg News & Advance this week, opponents of HNWD's project "have forced developer Tal McBride into sticking with the wind farm proposal for 10 years - a period he said is way too long for an alternative source that is wellestablished in other states." Tal McBride was quoted saying, ""Things are out of balance. It shouldn't take 10 years to permit and build a wind farm."
HNWD representatives met earlier this year with Department of Conservation and Recreation officials and citizens concerned about the company's erosion and sediment control plan, which has undergone numerous drafts. DCR inspector Mark Chambers had studied the Stormwater Pollution Prevention Plan (SWPPP) and determined the project did not yet comply with state regulations. He said at the time he would advise HNWD about what it needed to do to fix the problems.
This week, Jim Echols of DCR's Staunton office told The Recorder that Chambers had been on long-term sick leave since then, and no one from the agency was inspecting the project. "We're pinching through best we can, but Jim (Whitelaw, Highland building official) tells me everything's been pulled off the site, so there's nothing going on."
The new SWPPP the company was going to prepare has not been submitted to the DCR or county.
Last week, Whitelaw said he was still visiting the site after hard rains and watching for erosion and run-off problems. HNWD had built short stretches of road and done some grading on a few places under a land disturbing permit last fall. Whitelaw cannot release HNWD from the bond it placed for the permit until he is satisfied the ground is stabilized. "I'll keep inspecting until I deem it stabilized," he said. "There are still a few places where the grass isn't growing. All that may be OK in a few weeks, I don't know."
Whitelaw explained that although the land disturbing permit was for all the site work, there was only enough bond posted for the first phase. HNWD will need to put up more bond money if it does further site preparation.
Contacted this week, Vincent Pero at the Army Corps of Engineers says he has not heard from HNWD in months, either. The company was working with Pero to revise its site plans in order to avoid wetlands on the property. Since the last set of revisions, Pero said, "I have had no contact from HNWD at all. What's going on?"
David Whitehurst, director of DGIF's bureau of wildlife resources, said Tuesday he was unaware of any contact his agency has had with HNWD in months. "I haven't heard of any more meetings," he said, noting the last contact was the February meeting about the ITP process. DGIF's Ray Fernald, who was working with HNWD on those issues, confirmed he has not heard from the McBrides. "I haven't heard anything from them since that meeting," he said. "We have not heard from them at all in several months."
Most of those contacted speculate that HNWD's project is on hold while it seeks a purchase power agreement with some utility to buy the electricity it will generate, and investment money to pay for buying wind turbines and erecting towers.
A report last month by Stephen Lacey, podcast producer, in Renewable Energy World, indicates 2009 was a real struggle for wind energy developers nationwide and "financing was the big issue." He wrote, "There simply weren't enough financial players healthy enough to put money into projects" though federal stimulus money helped a few projects last year.
"But today," he continued, "financing isn't necessarily the main problem; it's demand. Due to a number of factors exacerbated by the dismal economy, some developers are simply unable to take advantage of the stimulus dollars available. Only 540 MW of wind capacity were installed in the first quarter of 2010, down 2,800 MW in the first quarter of 2009." Lacey's report cites some sources who predict things will pick back up in 12-18 months, but that this year, there is the potential for a 40-60 percent drop in wind project installations.
HNWD still has a valid state certificate to build its plant. The certificate included a sunset provision that required HNWD to get under construction within two years, by Dec. 20, 2009. HNWD did not do any construction before that date, only site work and grading. No one has challenged the certificate's validity, though citizens could file a case with the SCC arguing the developer failed to get its project under construction before the certificate expired.
According to SCC regulations, HNWD could file to amend, revise, withdraw or surrender its certificate for cause shown if the commission granted such a petition. Unless HNWD owners choose to do any of those things, the company's certificate remains valid indefinitely.