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)

New York state wind energy updates

From recent news and web reports:

Community wind opportunities discussed in Town of Batavia. Daily News 2/19

Town of Clayton wind committee discusses sound issues. Watertown Daily Times, 2/20

Cohocton turbines spinning, but per NYISO power not due to hit grid till late 2010.  Hornell Evening Tribune, 2/21

Town of Hunter reportedly extends wind moratorium six more months. The Daily Mail, 2/21

Morristown wind committee comes up with draft wind ordinance. Watertown Daily Times 2/20

Town of Prattsburgh hears about noise complaints from Cohocton residents. Courier, 2/22

After pitch, Pickens Plan piques Paterson’s interest. Star Gazette, 2/22

Wind developers discuss potential changes to Attorney General’s self-styled “code of conduct.” Watertown Daily Times, 2/23

New York wind power updates

According to recent press reports and releases:

First Wind scraps project in Town of Attica (Wyoming County) due to lack of wind, postpones Town of Prattsburgh (Steuben County) project due to lack of dinero. Buffalo News, 12/10. See also Corning Leader, 12/9, on Prattsburgh project.

Noble Environmental Power brings Clinton and Ellenburg (Clinton County) windparks back online after substation expansion. The company indicates that it:

remains dedicated to further construction and development in New York including completing the construction of the Noble Bellmont Windpark in Franklin County. However, given the continued state of uncertainty in the financial markets, the company is unable to speculate on its 2009 construction and development plans.

Noble Environmental Power, 12/4

First Wind to pay more than $1.1M to repair roads damaged during construction of Cohocton (Steuben County) wind project. Corning Leader, 12/7

Farmers in the Town of Mexico (Oswego County) learn about renewable energy alternatives, including wind, thanks to Cornell Cooperative Extension. OswegoCountyToday.com [Full disclosure: this blogger is a Cornell graduate. Go Big Red Hockey!]

Wind energy conversion system ordinances from the towns of Napoli and Perrysburg were to be reviewed by the Cattaraugus County Planning Board on December 11. Buffalo News, 12/8

BP Alternative Energy urges Jefferson County Industrial Development Agency (IDA) to finalize payment in lieue of taxes (PILOT) policy. Watertown Daily Times, 12/5

Patterson, New York wind company, BQ Energy, considers project in Nikiski, Alaska. If you happen to drive to Nikiski from Patterson, you’ll be on the Alaska Highway for over 1000 miles, after you’ve already driven about 3500 miles. Peninsula Clarion, 12/8

Per the Interstate Renewable Energy Council, “ConEdison, the main utility provider for New York City and Westchester County, filed [with the New York State Public Service Commission or PSC] proposed changes to its net metering tariff which would eliminate a site study requirement for systems up to 200 kW.”

Recent New York wind energy developments

Town of Naples accepts mitigation payment

Per the Daily Messenger (10/9), the Town of Naples (Ontario County) voted to accept a payment from developer First Wind to mitigate potential harm to historical assets in the town arising from wind farms in neighboring Cohocton in the western Finger Lakes region.

The town attorney is reworking an agreement between Naples and First Wind to make it clear that by accepting a cash payment, the town is not endorsing the Cohocton wind farms now under construction.

The Town Board has voted to accept $50,000 in what are called “mitigation funds,” to make up for any detrimental effect the appearance of windmills may have on Naples’ historic landmarks…

Westfield Town Board adopts final environmental scoping document

According to the Westfield Republican (10/9), the Town Board of Westfield (Chautauqua County) has adopted a final scoping document that outlines what developer Babcock & Brown will need to include in its Draft Environmental Impact Statement, required under New York’s environmental quality review act (SEQRA).

The Westfield Town Board adopted a Final Scoping Document for Babcock & Brown’s proposed Ripley-Westfield wind turbine project at its October 1st meeting. The Final Scoping Document was prepared by the Town Board, as co-lead agency with the Ripley Town Board, in conjunction with consultants from Environmental Design & Research. The Ripley Town Board is expected to discuss the document at an upcoming meeting.

Babcock & Brown Renewable Holdings, Inc., as project sponsor, submitted an application for Special Use Permit to the Towns of Westfield and Ripley in April. The proposed project would involve the installation and operation of an approximately 125-megawatt wind energy facility consisting of up to 83 wind turbine generators (WTGs). The project also includes an electrical substation, connection to a nearby electrical transmission line and 20 miles of access roadways…

New York state wind developments

Messenger Post (9/15) (from Steuben County) Editorial: State investigations, oversight critical

Another recent editorial calling on the state to thoroughly investigate the allegations against wind developers of improper dealing and to take an increased role in wind project siting:

…The state must investigate all such conflicts to see if wrongdoing occurred. Local officials must act in a manner beyond reproach by turning down all entreaties from private wind-turbine developers dangling lucrative lease deals in front of them. And the governor, state Legislature and attorney general must study this entire approval process so that localities have clear guidelines within which to operate.

Cohocton wind opponents lose in court

The Evening Tribune (9/16) reports that Cohocton Wind Watch had its court case against First Wind’s Cohocton (Steuben County) wind project dismissed. The Evening Tribune (9/17) followed up on the story.