Blaming “the ongoing appeals of the projects’ permits by an opposition group,” Wasatch Wind Intermountain officials said they are delaying construction of their Pioneer Wind Park I facility south of Glenrock until next year.
Also, on Monday, the company said it still plans to begin work on its other project, Pioneer Wind Park II, yet this year. Pioneer I and Pioneer II, each containing 31 wind turbines, are planned for mostly private land in the Boxelder/Mormon Canyon area about 10 miles south of Glenrock.
The delay of Pioneer I deals a blow to the economic outlook for Glenrock this summer, but a Glenrock Economic Development Corporation official said the project isn’t a long-term boom for the area.
“Construction of a wind farm doesn’t have a long-term impact from an economic development standpoint,” GEDC Chairwoman Mary Cannady said. “It provides a temporary boost for local merchants while it is being built, but it doesn’t provide a lot of employment once it’s done, so it really doesn’t have a material effect on GEDC and our efforts.”
For its part, Wasatch touts the benefits of the wind farm to the area, saying that once the projects are built, they would generate more than $6.5 million in sales tax in the first year and potentially more than $20 million in property and excise taxes over the next two decades.
The company argues that the projects would spur local economic development, bringing in additional revenue for local merchants and providing local employment opportunities. It said the projects would result in a capital investment in Converse County of more than $170 million, including improvements to the usability and safety of several local roads.
Company still Moving Forward with plans
Meanwhile, with the delay for Pioneer I construction until at least 2013, Wasatch’s 50-megawatt power purchase agreement with Rocky Mountain Power was terminated because the company could not fulfill the contractual terms to begin delivering power in October. The agreement is vital to the project because it assures financial backers that the wind power can be sold.
Wasatch Senior Vice President of Communications Michelle Stevens said the company is exploring other options for the sale of Pioneer I’s output, including the possibility of negotiating another power purchase agreement with Rocky Mountain Power.
The power purchase agreement for Pioneer II, however, remains in effect because it has a separate set of deadlines for the power from the wind turbines to begin flowing.
Wasatch said it will begin construction of Pioneer II this fall as scheduled. The power purchase agreement for that facility requires power to be delivered by the end of December, with “some buffer room if we don’t make that deadline,” Stevens said. “If it takes us a little longer than December 2012, we’ll still be okay.”
Stevens said that for now the company is not seeking an extension of the agreement for Pioneer II and is working to meet the required delivery date by planning for construction to begin this fall.
Opposition disputes reasons for delay
Northern Laramie Range Alliance and Northern Laramie Range Foundation have thrown up roadblocks to the company’s plans from the beginning, challenging in court both its state and county permits and its two power purchase agreements with Rocky Mountain Power. Most recently, NLRA filed appeals of the lower court decisions and federal agency rulings all in favor of Wasatch. NLRA, which claims 900 citizen members, is opposed to industrial development in or near the mountains of the Laramie Range.
“We don’t believe that our activity is the cause of this delay,” NLRA Steering Committee member Ken Lay said. “Nothing in any of our litigation has stayed their construction; there’s been no order preventing them from going forward. They have 21 conditions under their industrial siting permit which they have not met. We would differ with their characterization that the NLRA has prevented construction.
“At the same time, we are pleased that construction hasn’t started. We have 900 members who do not want to see large-scale industrial development in the mountains.”
Last May, the Converse County Commissioners approved the company’s county wind permit, and in June, the Wyoming Industrial Siting Council approved a conditional permit for the project. The ISC gave its final approval for construction on July 21, with numerous conditions attached.
Shortly thereafter, NLRA/NLRF filed suit challenging the issuance of those permits. Following an unfavorable ruling on the matter on Jan. 19 by state District Judge Keith Kautz, the groups appealed the decision to the Wyoming Supreme Court. A ruling is expected sometime this summer.
NLRA also appealed the Wyoming Public Service Commission’s ruling allowing the company to extend its power purchase agreement for Pioneer I, claiming the terms of the agreement are less favorable to ratepayers than other sources of electricity available. That appeal is moot as the extension to October 2012 granted to Wasatch cannot be met.
NLRA filed a challenge, as well, with the Federal Energy Regulatory Commission (FERC) asking it to nullify the company’s self-certifications that its wind farm project is two qualifying facilities for small power production instead of one larger project.
On March 15, FERC ruled against NLRA’s petition, prompting NLRA to file an appeal. Xcel Energy Services, the utility servicing Colorado and several other states, has joined NLRA in asking FERC to reconsider its denial of NLRA’s petition.
Wasatch Wind’s Stevens said they remain confident in the viability of the wind farm project.
“The decision to delay was difficult to make given the years of development and substantial resources that we have invested thus far and because so many people in the community are excited about the opportunities the wind projects will bring to the area,” Stevens said.
“Just as we’ve obtained the permits necessary for both projects and then prevailed in all the legal challenges to the projects thus far, we’re confident that the projects will move forward. However, at this time we simply feel it’s best to allow the legal process to play out before proceeding with construction.”
NLRA claims deeper issues May be behind delay
In a written release, NLRA on Monday said nothing in its appeals prevents Wasatch from moving forward with its construction plans. The release suggests there are deeper issues with Wasatch’s failure thus far to comply with the conditions attached to its industrial siting permit.
“These conditions include, notably, the legal requirement that it demonstrate the financial capacity to build, operate, maintain, decommission and reclaim the proposed project,” NLRA’s release states.
Stevens insists her company does have the financial ability, though she declined to provide more information, citing business confidentiality.
She takes issue with NLRA’s assertion that Wasatch has not met the permit conditions, and its characterization of the number of conditions being high.
“We have met some of the conditions, but others are not even applicable until certain things begin,” she said.
Wyoming Department of Environmental Quality Industrial Siting Division Administrator Todd Parfitt said that the average permit issued by his office contains 12-14 standard conditions, and the 21 conditions of Wasatch Wind’s permit is not an unusual number.
“They have not yet provided the information showing that they have the financial capabilities,” Parfitt said. “They have two years from the date the permit was issued – July 21, 2011 – to meet that requirement.”
NLRA also cited numerous points suggesting a change in the political climate for industrial-scale wind energy development in Wyoming, including the State of California’s ability to locally satisfy its demand for renewable energy.
Also, NLRA cited the Wyoming Legislature’s decision not to extend a moratorium on sales tax collection on wind energy equipment and its retaining “the sensible provision it adopted in 2010 requiring industrial wind energy promoters to demonstrate that they have the financial capacity to build operate and maintain the facilities they propose to undertake.”
Another factor, according to NLRA, may be the ending of the federal program providing cash grants to wind promoters covering 30 percent of their construction costs, as well as federal tax credits for wind energy generation that are set to expire at the end of this year.
Finally, the group cited Rocky Mountain Power’s request for a rate increase this year for Wyoming customers “even though utilities in many other states are reducing electricity prices due to declining prices for natural gas.”
“The termination of this PPA is good news for Rocky Mountain Power’s Wyoming customers, since the terminated PPA would have required the utility to purchase Wasatch- generated electricity at an inflated ‘wind proxy’ cost, without going through a competitive bidding process for allocating transmission capacity or determining price,” NLRA said in its release.
Stevens said Wasatch is working hard to satisfy the conditions of its permit and remains confident in its ability to prevail against legal challenges.