US Chamber: NY Wind Projects Delayed

According to the U.S. Chamber of Commerce, its new Project No Project report

assesses the broad range of energy projects that are being stalled, stopped, or outright killed nationwide due to “Not In My Back Yard” (NIMBY) activism, a broken permitting process and a system that allows limitless challenges by opponents of development.

The study is nationwide in scope and discusses energy projects generally. New York wind projects which, per U.S. Chamber of Commerce, are unnecessarily stalled are:

  • Adirondack Wind Energy Park, Gore Mountain
  • Alabama Ledge Wind Farm
  • Cape Wyckoff Wind Project
  • Allegany Wind Farm Project
  • Hardscrabble Wind Farm
  • Horse Creek Wind Farm
  • Jericho Rise Wind Farm
  • Jones Beach Wind Farm
  • Jordanville Wind Farm
  • Marble River Wind Farm
  • Prattsburgh Wind Farm

What is needed, according to the Chamber, is

a careful consideration of how all these permitting obstacles and uncertainties and time delays can be addressed so as to speed up the processing, consideration, approval decisions, and development of many of the job creatingprojects whose progress has so far been denied.

U.S. Chamber of Commerce report, Project No Project — Progress Denied: The Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects

Albany Times Union article

NYS Tax Dept: No sales tax on commercial wind farm [older]

In the oldie but goodie department, the New York State Department of Taxation and Finance Office of Counsel Advisory Opinion Unit issued an Advisory Opinion in December 2009, for PETITION NO. S080416A, relating to whether sales tax would apply to a BP commercial wind farm on leased property.

The Tax Department states:

Petitioner BP Wind Energy North America, Inc. requested an advisory opinion as to whether its construction and installation of a commercial wind farm on leased premises are considered a capital improvement and are subject to sales tax.

We conclude that Petitioner’s installations of its equipment on leased property pursuant to the terms of its lease agreement do not constitute a capital improvement to the leased premises. The assembly and installation of its wind generation equipment used directly and predominantly in the generation of electricity for sale may nonetheless qualify for exemption from sales tax pursuant to the provisions of sections 1115(a)(12), 1105(c)(3) and 1105-B of the Tax Law. The purchases of property, machinery and equipment (and charges for installation of that property) that do not qualify for the exemption for machinery and equipment used directly and predominantly in the generation of electricity for sale are subject to tax.

Advisory Opinion here.

Buffalo renewable energy potential discussed

Buffalo explores wind opportunities:

Buffalo has been known as the “city of light” for its pioneering role in harnessing electricity. Renewable energy advocates believe the region now has a golden opportunity to market itself as the city of wind power. In their eyes, it’s not an impossible dream that Buffalo could one day be a leader in the manufacturing and installation of energy-producing wind turbines.

Source: Buffalo News.

ACE-NY 2010 Policy Agenda favors “one stop shop” for energy facility siting

Well, we brought you the New York State Towns Association’s legislative agenda, which calls for continued local control over wind and other energy facilities siting. Comes the policy agenda of the Alliance for Clean Energy, NY, which favors a state “one stop shop”, with local representation. The issue of (clean or otherwise) power plant siting oversight has been a constant irritant for municipalities, developers and utilities alike since the expiration of Article X some seven years ago.

ACE NY strongly supports the enactment of a law establishing a “one-stop shop” siting board for new power plants. We support a fuel neutral siting bill but believe that if any generation projects are provided with streamlined permitting, that priority should be provided for clean energy projects. Since clean energy generation sources should be the state’s preferred generation resources, they may warrant slightly different substantive and procedural treatment within a reenacted siting bill. A siting board would provide much-needed consistency in treatment of projects across the state; better interagency coordination of needed permit approvals; and clearer, streamlined time frames for all interested parties. ACE NY supports the inclusion of provisions for intervenor funding and inclusion of local representation on the board for specific project review, and is open to discussion as to the appropriate project size limit for inclusion in a new statewide siting law.

The policy agenda otherwise endorses more wind energy, including offshore.

Source: Final ACE NY Policy Agenda 2010.

Statue of Liberty to hold wind turbine

In a surprise move, New York Governor David Paterson and President Barack Obama announced plans to install a wind turbine at the site of the torch held by the Statue of Liberty.

In a statement, President Obama said, “this enduring symbol of liberty will be reborn as a symbol not only of human freedom, but also of our independence from foreign sources of energy.” The announcement comes on the heels of the President’s decision to open swaths of the Atlantic and Alaskan coastlines to domestic oil drilling.

David Paterson echoed the sentiment, indicating in prepared remarks that  “New Yorkers can be proud that we are taking energy matters into our own hands, and placing them in the hand of Lady Liberty.”

An artist’s rendering of the plan is below. SOL image used with Creative Commons license. [http://www.flickr.com/photos/heardsy/ / CC BY 2.0]

More information on the announcement is here.

Statute of Liberty with wind turbine

Statute of Liberty with wind turbine. Artist's rendering.

First Wind files Amendment 5 to SEC Registration Statement

Lots of great information about the process and financing of wind development in New York State and elsewhere contained in Amendment No. 5 to FORM S-1 REGISTRATION STATEMENT of First Wind Holdings, Inc. before the U.S. SECURITIES AND EXCHANGE COMMISSION, filed March 26, 2010. As we know, New York is desirable for wind development because of a rich wind resource, relatively high electricity rates and its progressive renewable energy policies such as the Renewable Portfolio Standard (RPS). Here are some excerpts:

Our Portfolio of Wind Energy Projects
Operating Projects

Cohocton is a 125 MW project in Steuben County, New York. Cohocton commenced commercial operations in January 2009. The project consists of 50 2.5 MW Clipper turbines. Cohocton is the third largest wind project in the state of New York. Similar to Mars Hill (described below), Cohocton qualifies a portion of its energy for New England RECs. The project provides local benefits to the community through property tax revenue and economic development, along with local renewable power sales.

Cohocton wheels approximately 55% of its energy to ISO-NE where its RECs are sold to various counterparties. 40% of Cohocton’s RECs are sold to the New York State Energy Research and Development Authority (NYSERDA) under 10-year, fully financeable contracts. The remaining 5% of Cohocton’s RECs is sold into the voluntary REC market. Cohocton’s power is also sold directly into NYISO Zone C where it receives floating power prices. To stabilize Cohocton’s electricity revenue, we entered into a swap with an affiliate of Credit Suisse for approximately 70% of expected generation through the end of 2014. Cohocton was among the first recipients of an ARRA grant, receiving approximately $76 million in September 2009. The remainder of our construction costs at Cohocton are financed with a combination of senior project debt from HSH Nordbank and Norddeutsche Landesbank Girozentrale and structurally subordinated debt of CSSW, LLC. Our total installed development and construction costs for Cohocton were approximately $270 million, including approximately $10 million of financing-related costs and excluding prepaid turbine maintenance and warranty costs. We estimate Cohocton’s long-term NCF [net capacity factor] will be approximately 25% to 27%, as described further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”…

Steel Winds I

Steel Winds I, which commenced commercial operations in June 2007, is a 20 MW project on the shores of Lake Erie in Lackawanna, New York, just south of Buffalo. The larger site on which the project is located was formerly a steel mill. The project consists of eight 2.5 MW Clipper turbines, the first turbines of this type Clipper produced. We undertook this project primarily as a means of testing and gaining operating experience with the Clipper wind turbines. The project’s relatively small size allowed us to initially finance the project with 100% equity, which provided more flexibility as we worked with Clipper to understand the technology and deal with start-up issues that can be common in new turbine designs. We anticipate expanding Steel Winds in 2010 to bring the total project size to 35 MW, which we believe will introduce benefits of scale.

For power at Steel Winds I we receive floating power prices within New York Independent System Operator (NYISO) Zone A. To stabilize this revenue, we entered into a swap with an affiliate of Morgan Stanley. The volume of this swap is approximately 95% of Steel Winds’ expected output. This hedge expires at the end of 2016. In January 2010, we entered into a five-year PPA with an affiliate of Just Energy Income Fund for all RECs from the project. Steel Winds I qualifies for PTCs and MACRS depreciation and receives cash payments for electricity and RECs. Our total installed development and construction costs for Steel Winds I were approximately $35 million, excluding prepaid turbine maintenance and warranty costs, and are financed by a combination of equity and structurally subordinated debt of CSSW, LLC. We estimate Steel Winds I’s long-term NCF will be approximately 29% to 31%, as described further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”…

2010 Projects

…       Steel Winds II

Steel Winds II is a 15 MW expansion project in Lackawanna, New York. It will consist of six 2.5 MW Clipper turbines and will use our existing infrastructure, including interconnection equipment and site personnel. We are currently in the process of securing the necessary land and other rights to conduct and operate the project. The project’s System Reliability Impact Study and Facilities Study is complete and we are working towards an interconnection agreement with the New York Independent System Operator (NYISO) and National Grid. While we continue to evaluate alternatives, we anticipate selling power from Steel Winds II directly into the market through NYISO Zone A and hedging our revenue with a financial swap. We estimate that our total installed development and construction costs for Steel Winds II will be approximately $40 million, including approximately $5 million of financing-related costs and excluding prepaid turbine maintenance and warranty costs. We estimate that Steel Winds II’s long-term NCF will be approximately 28% to 30%….

Purchase of Prattsburgh Real Property

On February 22, 2008, we entered into a purchase agreement with Windfarm Prattsburgh, LLC, a Delaware limited liability company and our indirect wholly owned subsidiary; UPC Wind Partners II, LLC; and BEC New York Properties, LLC, a Delaware limited liability company that is owned by Brian Caffyn, with respect to a parcel of land situated in the town of Prattsburgh, New York pursuant to which Windfarm Prattsburgh, LLC purchased the parcel of land from BEC New York Properties, LLC. Windfarm Prattsburgh, LLC agreed to purchase the parcel for (i) consideration of 152,527 Series A Units in UPC Wind Partners LLC to be granted to UPC Wind Partners II, LLC as the seller’s designee and (ii) a payment of $23,000 from Windfarm Prattsburgh, LLC to BEC New York Properties, LLC. In connection with that transaction, First Wind Holdings, LLC granted 152,527 Series A Units for non-cash consideration to UPC Wind Partners II, LLC….

Project Development Costs
… Should the Company decide to abandon or discontinue development of a Tier 1 project, previously capitalized costs are charged to expense in the period that such determination is made. At December 31, 2008, the Company determined that it was more likely than not that it would discontinue development of its Prattsburgh I project, which is located in New York. Upon reaching this determination, previously capitalized development costs of $3.5 million were expensed in December 2008 and included in project development expenditures in the statement of operations. In December 2009, the Company discontinued the development of the Prattsburgh I project….

Legal Proceedings

The Company is involved from time to time in litigation and disputes arising in the normal course of business, including proceedings contesting our permits or the operation of our projects. Management does not believe the following proceedings will, if determined adversely, have a material adverse effect on the financial condition, results of operations and liquidity of the Company:

On July 15, 2008, the Company was served with a civil subpoena by the New York State Attorney General relating to an investigation into its activities in the State of New York. In response to the subpoena, First Wind produced documents and information relating principally to the New York State Attorney General’s investigation into: (i) whether the Company improperly sought or obtained land-use agreements with citizens and public officials, (ii) whether improper benefits were given to public officials to influence their actions and (iii) whether the Company and its competitors entered into anti-competitive agreements or practices. The Company cooperated fully with the requests of the New York State Attorney General, with the assistance of outside counsel. Outside counsel also conducted its own internal investigation on behalf of the Company. On October 29, 2008, the Company voluntarily agreed to implement a Code of Conduct, created by the New York State Attorney General to govern the Company’s future conduct in connection with wind energy project development in New York State. The Company entered into a subsequent version of the New York code in October 2009. The Company has been advised by the New York State Attorney General’s office that it is not currently under investigation….

Source: First Wind SEC filing. See also “Wind-Power Developer First Wind To Price IPO In April”  from Dow Jones (3/31)

Small wind gets RPS boost from PSC in New York state

Small wind, other renewable projects get a boost from New York State Public Service Commission (PSC). From the PSC:

The Commission [on March 25] approved more than $279 million over a five-year period for customer-sited
renewable energy projects as part of the state’s Renewable Portfolio Standard (RPS) program. This funding will enable thousands of homeowners and businesses to install solar panels, fuel cells, wind turbines and other renewable energy devices.

Source: NYS PSC press release. Check here for the Commission’s decision in Case 03-E-0188.