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Otter Tail Power, Pipeline Co. Drop Plans For Wind Project

BISMARCK, N.D. -- Two utilities and a pipeline company have dropped plans to build a wind farm in southeastern North Dakota, in part because of rising wind turbine prices, officials said.

Tony Clark, president of the North Dakota Public Service Commission, said some blame for the setback should be borne by Minnesota regulators, who he said were slow in reviewing the proposal.

"Minnesota is a very regulatory-minded state when it comes to mandating a lot of things," Clark said Friday. "And so, it causes companies, I think, unfortunately sometimes, to have to jump through hoops that they wouldn't otherwise jump through."

Spokesmen for the Minnesota Public Utilities Commission said the project's structure was complicated and required scrutiny to ensure ratepayers were protected.

"The commission had some questions that it felt needed to be answered, and it just takes time to develop responses to them," said Burl Haar, the PUC's executive secretary.

Cris Kling, a spokeswoman for Otter Tail Power Co., said a sharp increase in wind turbine prices in recent months was a key reason the project was dropped. The wind farm development could be revived later, but likely not before 2007, Kling said.

"It's a very complex transaction and that's probably the main reason it got bogged down," she said. "We'll probably take another run at it, but that will take some time."

Otter Tail, of Fergus... more [truncated due to possible copyright]  
Tony Clark, president of the North Dakota Public Service Commission, said some blame for the setback should be borne by Minnesota regulators, who he said were slow in reviewing the proposal.

"Minnesota is a very regulatory-minded state when it comes to mandating a lot of things," Clark said Friday. "And so, it causes companies, I think, unfortunately sometimes, to have to jump through hoops that they wouldn't otherwise jump through."

Spokesmen for the Minnesota Public Utilities Commission said the project's structure was complicated and required scrutiny to ensure ratepayers were protected.

"The commission had some questions that it felt needed to be answered, and it just takes time to develop responses to them," said Burl Haar, the PUC's executive secretary.

Cris Kling, a spokeswoman for Otter Tail Power Co., said a sharp increase in wind turbine prices in recent months was a key reason the project was dropped. The wind farm development could be revived later, but likely not before 2007, Kling said.

"It's a very complex transaction and that's probably the main reason it got bogged down," she said. "We'll probably take another run at it, but that will take some time."

Otter Tail, of Fergus Falls, Minn., FPL Energy, of Juno Beach, Fla., and Enbridge Inc., a pipeline and energy distribution company based in Calgary, Alberta, have been exploring construction of a 70.5-megawatt wind farm in western Dickey County, on the South Dakota border.

As planned, the project required 47 wind turbines. It generated some public attention last summer, when the county's Spring Valley township adopted zoning rules for wind towers. Spring Valley became the first North Dakota township to have zoning regulations for wind projects.

FPL Energy intended to build the wind farm, to be owned by subsidiaries of the three companies, Minnesota PUC filings say. Otter Tail planned to buy the wind turbines' power and sell it to Enbridge, an Otter Tail customer that accounts for 9 percent of the utilities total power sales.

The Dickey County project was to be Enbridge's first U.S. venture into wind energy. Company spokesmen did not respond Friday to telephone messages left for comment.

The companies sought regulatory reviews of the project in Minnesota, North Dakota and South Dakota, in part because Otter Tail needed approval of changes to a monthly adjustment on customers' electric bills that account for fluctuations in fuel costs.

Earlier this month, an Otter Tail attorney sent letters to utility regulators in the three states, asking to withdraw the requests. North Dakota's Public Service Commission voted to grant the withdrawal on Friday.

Minnesota regulators wanted to ensure the project would not affect other Otter Tail electric ratepayers, and that it complied with Minnesota laws that regulate dealings among company affiliates, agency filings say.

Louis Sickmann, a Public Utilities Commission financial analyst, said the project's business structure was "incredibly complex, and these are details that are important for the customers that we're charged to protect."

"On the surface, there was a certain level of excitement -- ŒWow, that's a lot of wind,"' Sickmann said. "We're not necessarily opposed to wind. This is good. But as it got into the details, it got more difficult."

Source: http://www.yankton.net/stor...

DEC 31 2005
http://www.windaction.org/posts/872-otter-tail-power-pipeline-co-drop-plans-for-wind-project
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