New York wind power guys speak

What follow are separate interviews with representatives of two leading New York state wind developers.

The first is an 9-minute audio recording of an interview this blogger conducted earlier this year with Patrick Doyle, Principal of NorthWind and Power LLC.

The second is a ten-minute video interview with First Wind CEO Paul Gaynor (New England Cable News, 9/25). First Wind, a recipient of substantial federal stimulus funds, is the developer of multiple projects in New York state.

Presentation of, or linking to, these interviews is intended solely to serve educational purposes. Views expressed in them belong exclusively to the speaker and should not be construed as the views of Clifford Rohde or any of his past or current clients.

Attorney General establishes wind company code of conduct

The following press release was issued today by the New York State Office of the Attorney General. It is a response to Attorney General Cuomo’s investigation, launched this past summer, into allegations of improper behavior with respect to Noble Environmental Power’s and First Wind’s efforts to site projects in the state.

The code itself was not available at the time of posting. At a press conference today, the Attorney General made clear that this does not conclude the Attorney General’s investigation. [Update: To clarify, subscription to the code is voluntary, not mandatory.]

The code and creation of a Task Force highlight, however, the degree of care both towns and developer alike must place on a transparent, ethical siting process.

ATTORNEY GENERAL CUOMO ESTABLISHES CODE OF CONDUCT FOR WIND ENERGY COMPANIES OPERATING IN NEW YORK

Noble Environmental Power and First Wind first to sign Wind Industry Ethics Code

New Task Force to monitor and ensure compliance includes: District Attorneys Gerald Stout, Michael Green, and Derek Champagne, Executive Director of the NYS Association of Counties Stephen Acquario, Executive Director of the NYS Association of Towns G. Jeffrey Haber, and NYPIRG’s Legislative Director Blair Horner

ALBANY, N.Y. (October 30, 2008) – Attorney General Andrew M. Cuomo today announced a new Wind Industry Ethics Code that establishes guidelines to facilitate the development of alternative energy in New York while assuring the public the wind power industry is acting properly and within the law. The Code calls for new oversight through a multi-agency Task Force, and establishes unprecedented transparency that will deter any improper relationships between wind development companies and local government officials.

The first companies to sign the Attorney General’s Wind Industry Ethics Code are Essex, Connecticut-based Noble Environmental Power, LLC and Newton, Massachusetts-based First Wind (formerly known as UPC Wind). Both companies currently operate wind farms in New York and have several others in development.

“Wind power is an exciting industry for the state that will be a cornerstone of our energy future. But it is important to make sure that this alternative energy sector develops in a way that maintains the public’s confidence, and that is what this new Code of Conduct does,” said Attorney General Cuomo. “I commend Noble and First Wind for taking the lead by adopting this Code, and we fully expect other companies that want to develop wind farms in New York to follow suit.”

The Wind Industry Ethics Code is a result of the Attorney General’s investigation into, among other things, whether companies developing wind farms improperly sought land-use agreements with citizens and public officials, and whether improper benefits were given to public officials to influence their official actions relating to wind farm development. Both Noble and First Wind fully cooperated in the inquiry and their assistance was instrumental in developing the Code of Conduct that is being announced today.

The Attorney General’s Wind Industry Ethics Code prohibits conflicts of interest between municipal officials and wind companies and establishes vast new public disclosure requirements. The Code:

  • Bans wind companies from hiring municipal employees or their relatives, giving gifts of more than $10 during a one-year period, or providing any other form of compensation that is contingent on any action before a municipal agency
  • Prevents wind companies from soliciting, using, or knowingly receiving confidential information acquired by a municipal officer in the course of his or her officials duties
  • Requires wind companies to establish and maintain a public Web site to disclose the names of all municipal officers or their relatives who have a financial stake in wind farm development
  • Requires wind companies to submit in writing to the municipal clerk for public inspection and to publish in the local newspaper the nature and scope of the municipal officer’s financial interest
  • Mandates that all wind easements and leases be in writing and filed with the County Clerk
  • Dictates that within thirty days of signing the Wind Industry Ethics Code, companies must conduct a seminar for employees about identifying and preventing conflicts of interest when working with municipal employees

Attorney General Cuomo is also establishing a new Task Force that will monitor wind companies to ensure they are in compliance with the Code of Conduct. Members of the Task Force will include: a representative from the Office of the Attorney General, Franklin County District Attorney Derek P. Champagne, Monroe County District Attorney Michael C. Green, Wyoming County District Attorney Gerald Stout, Executive Director of the New York State Association of Counties Stephen Acquario, Executive Director of the New York State Association of Towns G. Jeffrey Haber, and New York Public Interest Research Group Legislative Director Blair Horner.

The New York State Energy Research Development Authority (NYSERDA) estimates that wind power has the potential to provide 20 percent of the state’s electricity demand and a 2005 report by the state Comptroller’s Office estimates the alternative energy industry could add 43,000 jobs in New York by 2013.

Noble Environmental Power, LLC, has three active wind farms in New York; the Noble Clinton Windpark and Noble Ellenberg Windpark in Clinton County, and the Noble Bliss Windpark in Wyoming County. Other possible future locations include Allegany, Chautauqua, Clinton, Franklin, and Wyoming Counties.

First Wind has one operational wind farm in New York, the Steel Winds wind farm in Erie County. Possible future locations include Steuben and Chautauqua Counties.

Franklin County District Attorney Derek P. Champagne said, “This common sense approach by Attorney General Cuomo will help ensure the promise of clean, renewable energy is not tainted by shady deals and improper relationships between wind power companies and local government officials. I look forward to taking part in the new task force and applaud the Attorney General for his leadership on this important issue.”

Wyoming County District Attorney Gerald Stout said, “Wind power not only provides us with clean, renewable energy, it can also serve as an economic engine for New York. Attorney General Cuomo’s Code of Conduct and the introduction of the new task force are both important steps in making sure corrupt influences do not put this growing industry in peril.”

Monroe County District Attorney Michael C. Green said, “I commend Attorney General Cuomo for establishing this new Code of Conduct for the wind-power industry. When properly developed, wind power can and should play a vital role in our state’s energy future, but it cannot happen in a way that erodes public confidence with allegations of self-dealing and corruption. The Attorney General’s new code of conduct and task force will ensure that wind companies stay in compliance without unduly burdening the companies’ ability to do business in New York.”

Senator George Maziarz, Chair of the Senate Energy and Telecommunications Committee said, “Attorney General Cuomo has again proven that the best way to tackle challenging issues is through cooperation at all levels of government. By working together we can ensure that this promising industry will continue to flourish in New York.”

Assemblyman Kevin Cahill, Chair of the Assembly Energy Committee said, “Wind power will play an important role in achieving energy independence through a growing reliance on clean, renewable resources. In order to reach that goal effectively, it is essential that all parties involved play by the rules and adhere to the highest standards of ethics. I applaud Attorney General Cuomo for his efforts on this issue.”

New York State Association of Counties Executive Director Stephen J. Acquario said, “Local governments have taken the lead in siting wind energy generating facilities, which provide essential renewable energy into the electrical grid. Simultaneously, county ethics boards continue to take their role in policing conflicts of interest pertaining to the siting of wind power very seriously. Attorney General Cuomo’s Code of Conduct is an important step in helping make sure public confidence remains strong as this burgeoning industry develops across our counties.”

Executive Director of the New York State Association of Towns G. Jeffrey Haber said, “This is a new rapidly growing industry with exciting potential – as well as new challenges – for all of us. Attorney General Cuomo, working with all interested parties, has taken a strong leadership role in developing guidelines to help us all as the industry develops and evolves across New York state.”

Blair Horner, Legislative Director of the New York Public Interest Research Group said, “Good ethics requirements helps build a better business climate. Companies that play by the rules should never be put at a competitive disadvantage. And the public should know that private-public deals are made in the public’s best interest. This Code will help ensure that this important industry grows and prospers in New York.”

Walter Q. Howard, President and Chief Executive Officer of Noble Environmental Power said, “Noble has always been fully committed to the ethical and transparent development of renewable resources, and has supported the work of the Attorney General and his staff in the development of the new Wind Industry Ethics Code. We are gratified that going forward there will be clear guidelines with respect to ethical behavior and conflict of interest, and are committed to continuing to operate in conformity with the principles laid out today in this Code.”

Paul Gaynor, President and Chief Executive Officer of First Wind said, “We are pleased to have cooperated with the Office of the New York Attorney General in its efforts to bring clarity to the wind industry in New York State. We have always held ourselves to high standards, and we hope that other firms will join us in signing on to this Code of Conduct. We believe it is good for us, good for the industry and good for New York.”

Any complaints about wind development companies should be sent to the newly created Task Force by e-mailing them to WindTaskForce@oag.state.ny.us. Complaints about other industries or local officials should be made to the Office of the Attorney General by e-mailing them to public.integrity@oag.state.ny.us or by calling 1-800-428-9072.

The matter is being handled by Special Deputy Attorney General Ellen Nachtigall Biben, who oversees the Attorney General’s Public Integrity Bureau, Deputy Bureau Chief Monica Stamm, Assistant Attorneys General Andrew Heffner and Robert Vawter, and Executive Deputy Attorney General for Criminal Justice Robin L. Baker.

[Added 10/31] New reports (and an editorial) on the new wind ethics code include:

Articles highlight NY wind siting challenges

Two recent articles highlight wind project siting challenges in New York state.

The first, a primarily human interest piece by the Associated Press, describes familial acrimony that developed around the Maple Ridge wind farm in Lowville, which is New York’s largest operational wind farm. Unlike wind-rich rural lands in the Midwest, New York’s wind resources are located in areas made up of scores of small parcels. The vast tracts of property that exist to the west generally cannot be found in New York.  While strife within a family obviously is not unique to New York, the potential for coming across wind project land ownership challenges is great here, as numerous small, individually-owned parcels are needed to create a sizeable wind farm.

The second story, from the New York Times, illustrates the potential for local siting problems when a few developers flush with investment capital rush to the finite areas in the state where wind resources are adequate to merit a wind farm project. Among other issues, the article discusses the allegations of improper currying of favors against Noble Environmental Power and First Wind that currently are being investigated by New York state Attorney General Andrew Cuomo. For wind-rich locales, ensuring a transparent, legal and equitable zoning process is paramount. It goes without saying that any credible allegations of anti-competitive activities should also be investigated thoroughly.

First Wind IPO to raise up to $450M

First Wind Holdings Inc. filed preliminary papers July 31, 2008 with the Securities and Exchange Commission (SEC) in preparation for an initial public offering (IPO) of up to $450 million in stock. It becomes, to this blogger’s knowledge, the second major U.S. wind developer to file such papers, after Noble Environmental Power filed preliminary IPO papers in May 2008.

In the First Wind SEC filing, the company indicates that

We are a leading independent North American wind energy company focused exclusively on the development, ownership and operation of wind energy projects. As of June 30, 2008, our portfolio of wind energy projects included approximately 5,564 megawatts (“MW”) of capacity, of which 92 MW were operating and 182 MW were under construction. We expect to start construction on a 203 MW project in 2008 and, as a result, to be simultaneously constructing three wind energy projects representing 385 MW of capacity. Our goal is to have approximately 1,100 MW of operating capacity by the end of 2010 and we target the construction and commissioning of approximately 400 MW annually thereafter to achieve approximately 2,300 MW of operating capacity by the end of 2013. We have entered into purchase contracts for turbines with an aggregate generating capacity in excess of 1,300 MW, which are scheduled to be delivered or commissioned between 2008 and 2013. We expect this supply will be sufficient to meet all of our anticipated turbine needs in 2008 and 2009 and approximately 80% of our anticipated turbine needs in 2010. Our ability to complete the projects in our development pipeline and achieve our targeted capacity is subject to a number of risks and uncertainties as described in the “Risk Factors” section of this prospectus.

The company indicates that it has some 117 megawatts at the intermediate stage in its portfolio from New York (to be operational in 2010-11) and that

In January 2008, we executed an agreement for an additional $208.0 million tax equity financing related to a portfolio of our New York projects.

The projects are Steel Winds I, Cohocton I and Prattsburgh I. The company cautions, however, that

we recently were served with a civil subpoena by the New York Attorney General relating to an investigation of our activities in the State of New York. The costs related to this investigation, as well as our own internal investigation, could be significant. The investigations being conducted by the New York Attorney General and our outside counsel are at an early stage. Therefore, we are unable to anticipate when these investigations may conclude, or what impact the New York Attorney General’s investigation may have on current or future development plans, although a material adverse result is possible.

Elaborating later in the document, First Wind notes that

On July 15, 2008, we were served with a civil subpoena by the New York State Attorney General relating to an investigation into our activities in the State of New York. The subpoena we received contains broad requests for documents and information relating to: (i) whether we 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 we and our competitors entered into anti-competitive agreements or practices.

We intend to fully cooperate with the requests of the New York State Attorney General and towards this end, we have engaged outside counsel to assist us in connection with this matter and to conduct our own internal investigation. The costs incurred in connection with these investigations to date have not been material, but the costs related to these investigations, including our own internal investigation, could be significant. The investigations being conducted by the New York Attorney General and our outside counsel are at an early stage. Therefore, we are unable to anticipate when these investigations may conclude, or what impact the New York Attorney General’s investigation may have on current or future development plans, although a material adverse result is possible.

Noble Environmental Power, the other potential wind IPO company, is similarly being investigated by New York’s Attorney General.

Quite active in New York (gotta love those high retail electricity rates) and the Northeast, First Wind indicates that

[it] believe[s] the Northeast is one of the most attractive wind energy markets in the continental U.S. due to the region’s high electricity prices and decreasing energy reserve margins, as well as the region’s limited utility-scale development opportunities and transmission limitations that constrain future increases of capacity in the region. In this region, FERC has approved ISOs in New York (“NYISO”) and New England (“ISO-NE”) to administer wholesale electric energy markets in their respective regions. The ISOs also control access to and the operation of the transmission grid used for wholesale power sales within their respective regions. In addition, capacity markets have developed in the region to promote the development and continued operation of capacity sufficient to meet regional load and reserve requirements. These markets have been established to ensure that generators receive capacity payments based on their availability to generate electricity.

The company offers the following information about its New York operating and under construction wind farms:

Steel Winds I

Steel Winds I is a 20 MW operating wind energy project situated approximately 150 feet from the shores of Lake Erie on a portion of a 1,600 acre site on Lake Erie in Lackawanna, New York. The larger site on which the project is located was formerly operated as a steel mill. We lease the site from a party that is subject to significant environmental remediation requirements as a result of the historic steel mill operations on the project’s site, as more fully described below in “Other.” We completed this project in June 2007. During the first year of commercial operations, Steel Winds I experienced technical difficulties with the Clipper Windpower turbines. As of May 17, 2008, all eight of the turbines at Steel Winds I had been remediated. See “-Suppliers” for more information. We anticipate this project will have an approximate 31% to 33% net capacity factor over 25 years. Assuming a 32% net capacity factor, the average annual electrical production is projected to be 56 GWh.

Development history. Steel Winds I was initially developed by an independent developer. In June 2007, we assumed control of the project, including final project design, permitting, land rights and construction and currently own 100% of the project, subject to a carried interest and earn-out we granted to the prior developer. Steel Winds I represents the first ever wind energy project built on a brownfield site, and successful development of the site required us to address a number of complex environmental concerns. The pre-existing infrastructure associated with the prior steel mill operations, including the substation, operations buildings and roadways, enhanced the economic feasibility of this wind energy project. In addition, the eight Clipper Windpower turbines in operation at Steel Winds I represent the first commercially produced LibertyTM turbines.

Land. Steel Winds I is located on land owned by Tecumseh Redevelopment Inc., a subsidiary of Mittal Steel USA. We sublease the project site under a sublease agreement effective as of June 1, 2007. The initial term of the sublease is 25 years and we may at our option extend the sublease for two additional 12-year periods. We have prepaid rent until 2011 under the sublease and thereafter will pay annual market-based rents.

Plant and interconnection overview. Steel Winds I employs eight LibertyTM wind turbines. See “-Suppliers” for more information on Clipper Windpower. Each turbine generates power that is collected by overhead lines, transmitted to the pre-existing on-site substation that was previously used as part of the steel mill’s operations and interconnected at the substation to Niagara Mohawk Power Corporation’s transmission system. Tennessee Valley Infrastructure Group constructed Steel Winds I and erected the turbines and Clipper Windpower commissioned the turbines.

Revenue. Wind energy generated at Steel Winds I is sold to Constellation New Energy pursuant to a three-year PPA executed in July 2006. Under the PPA, wind energy produced by Steel Winds I must be purchased by Constellation New Energy at a market rate based on Zone A of NYISO power prices until December 31, 2009. To hedge power price variability and enhance our financing options, we entered into a 9.5 year financial swap agreement with Morgan Stanley. Under the PPA, RECs earned by electrical production at Steel Winds I are sold to Constellation New Energy at a fixed rate and we receive capacity payments.

Financing. The approximately $35.0 million construction cost of Steel Winds I was financed by equity investments made by us. We executed an agreement for a $208.0 million tax equity financing related to a portfolio of projects that includes our Steel Winds I, Cohocton I and Prattsburgh I projects. Funding will occur in tranches upon commencement of commercial operations of each applicable project and the satisfaction of certain other conditions precedent.

Permitting and compliance. Steel Winds I is operating under several permits, and we believe the project is in material compliance with the terms of its permits.

Other. In 2007, the independent developer that was developing Steel Winds I entered into a Brownfield Site Cleanup Agreement with NYSDEC, pursuant to which he agreed to undertake certain environmental investigatory and remediation activities on the portion of the former steel mill site on which the Steel Winds I project is located. In December 2007, NYSDEC issued a Certificate of Completion to us confirming that we had completed the requirements of the agreement and achieved a cleanup level consistent with commercial and industrial use of the site. The issuance of the Certificate of Completion provides us with protection against liability to the State of New York for contamination at or emanating from the site, subject to certain conditions. The site is subject to certain ongoing environmental monitoring and maintenance conditions.

…Our Steel Winds I project is located on a former steel mill property that is considered to be a brownfield site. In 2007, the independent developer that was developing Steel Winds I entered into a Brownfield Site Cleanup Agreement with NYSDEC, pursuant to which he agreed to undertake certain environmental investigatory and remediation activities on the portion of the site on which the project is located. In December 2007, NYSDEC issued a Certificate of Completion to us confirming that we had completed the requirements of the agreement and achieved a cleanup level consistent with commercial and industrial use of the site. The issuance of the Certificate of Completion provides us with protection from cleanup liability to the State of New York, but not against liability from third-party claims. We are required to implement certain ongoing environmental monitoring and maintenance requirements at the site as part of our liability protection.

…Cohocton I

Cohocton I is a 125 MW wind energy project under construction on approximately 5,700 acres of land in the Town of Cohocton, Steuben County, New York. We expect Cohocton I to become operational in December 2008. We anticipate this project will have an approximate 27% to 29% net capacity factor over 25 years.

Development history. We began development of Cohocton I in 2003 with another independent wind developer and in 2004 we acquired the other developer’s interest in the project. We began construction on Cohocton I in August of 2007 with a projected completion date in the fourth quarter of 2008. Upon completion, Cohocton I will be the second largest wind energy project in New York.

Land. We have rights to occupy the land on which Cohocton I is situated through a combination of leases with over 30 private landowners and leases and permits from four governmental agencies. The initial terms of our leases range from 24 to 27 years, and we have an option to extend such leases for an additional 20 years. We pay market-based rents on these leases.

Plant and interconnection overview. Cohocton I will employ 50 Clipper Windpower Liberty ITM wind turbines that will be interconnected to the New York State Electric and Gas Corporation’s 230 kV Meyer/Hillside transmission line. We finalized an interconnection agreement covering Cohocton I with the New York State Electric and Gas Corporation for filing with FERC. The interconnection agreement lasts 25 years from the date of its execution with automatic one-year renewals thereafter. In connection with construction of Cohocton I we entered into a construction contract with M. A. Mortenson Company for the balance of plant construction, including turbine erection, and a construction contract with MSE Engineering for the construction of substations and a transmission line.

Revenue. Wind energy generated at Cohocton I will be sold directly into the New York power grid at market rates. To hedge power price variability and enhance our financing options, we entered into a ten-year power swap with Credit Suisse Energy LLC. In March 2007, we entered into two agreements with the New York State Energy Research and Development Authority (“NYSERDA”), that resulted in NYSERDA’s purchasing a portion of the RECs generated from Cohocton I. The contracts are effective upon commencement of commercial operations and extend for ten years thereafter. We expect to receive capacity payments at Cohocton I.

Financing. The approximately $265.0 million construction cost of Cohocton I is currently being financed by a combination of equity investments made by us and construction and turbine supply loans. We executed an agreement for a $208.0 million tax equity financing related to a portfolio of projects that includes our Steel Winds I, Cohocton I and Prattsburgh I projects. Funding will occur in tranches upon commencement of commercial operations of each applicable project and the satisfaction of certain other conditions precedent.

Permitting and compliance. In August 2007, the planning board of the town of Cohocton, New York issued the project a special use permit and site plan approval under the Town of Cohocton’s Windmill Local Law. The validity of the issuance of this permit has been challenged….

…Three Article 78 special proceedings appealing the issuance of the special use permits that were issued for the construction and operation of our Cohocton I project were instituted in the Supreme Court of the State of New York, Steuben County on August 31, 2007 by local individuals against the Town of Cohocton Planning Board, the project companies owning Cohocton I, First Wind Energy, LLC (formerly UPC Wind Management, LLC), an affiliate of the project companies owning Cohocton I, and several landowners. An Article 78 special proceeding is an expedited procedure whereby approvals from state and local bodies or officials can be challenged for alleged errors made in the course of issuing such approval. Each Article 78 proceeding alleges the same 12 causes of action, all of which relate to alleged procedural inadequacies or violations of law. In addition, two of the proceedings allege violations of noise regulations. In each of these proceedings, the petition seeks to invalidate either a portion of or our entire special use permit for Cohocton I and to enjoin construction of Cohocton I. None of the individuals has sought a restraining order or injunction to stop construction and there is no stay issued in connection with these proceedings. If the petitioners are successful in invalidating all or part of the special use permits, we would be required to re-apply for special use permits to allow us to construct and operate the project, which would result in construction delays and a delay in the commencement of commercial operations of Cohocton I. Because construction of Cohocton I is progressing to completion, we are preparing a motion to dismiss the Petitioners’ claims as moot.

A developing project is Prattsburgh I:

Prattsburgh I is a 54 MW wind energy project located on approximately 2,185 acres in the towns of Prattsburgh, Steuben County, New York and Italy, Yates County, New York. We anticipate this project will have an approximate 27% to 29% net capacity factor over 25 years. We own part of the land on which Prattsburgh I is situated, lease the turbine sites from 16 private landowners and have easement agreements with a majority of the landowners along the route of the underground collection line. Prattsburgh I will employ 36 GE Energy wind turbines that will be interconnected to the New York State Electric and Gas Corporation’s 115 kV transmission line in the town of Italy, New York. We entered into an interconnection agreement covering Prattsburgh I with New York State Electric and Gas Corporation in July 2004. The interconnection agreement is effective from the project’s commercial operations date until June 2024. In connection with construction of Prattsburgh I we expect to enter into a construction contract with M.A. Mortenson Company for the balance of plant construction and turbine erection and a construction contract with MSE Engineering for the substation design and construction. Our power sales and hedging activities are identical to Cohocton I. Similar to Cohocton I, in March 2007 we entered into an agreement with the NYSERDA that results in NYSERDA’s purchase of a portion of the RECs generated from Prattsburgh I. The contracts are effective upon commencement of commercial operations and extend for ten years thereafter. We expect to receive capacity payments at Prattsburgh I. The Steuben County Industrial Development Agency (“SCIDA”) was designated as the lead agent for the State Environmental Quality Review (“SEQR”) for Prattsburgh I. In July 2007, SCIDA issued positive findings under SEQR concluding that the project was approvable and had made adequate provision for minimizing and mitigating impacts to environmental and cultural resources. In addition, we received a special use permit from the town of Italy, New York for the construction of the Prattsburgh substation. Approval from the Army Corps under Section 404 of the Clean Water Act for minor impacts to wetlands was received on March 17, 2008. We expect to commence construction at Prattsburgh I in 2009. We currently have turbines under contract that we have allocated to Prattsburgh I.

…On April 21, 2008, the Town Board of Prattsburgh voted in favor of passing a resolution calling for a public hearing to consider the issue of condemnation of six easements necessary for the completion of construction of our electrical interconnection system for our Prattsburgh I project. Prattsburgh has commenced eminent domain proceedings against the landowners who hold these easements and is currently in the process of sending offer letters to the affected landowners. On July 17, 2008, an Order to Show Cause was filed in the Supreme Court of the State of New York, Steuben County by local individuals and a local opposition group against the Town Board of the Town of Prattsburgh and us seeking to annul the resolution relating to the eminent domain proceedings. The order alleges that the Town Supervisor (a Town Board member) had a conflict of interest when voting to authorize condemnation proceedings. In addition, on July 28, 2008, an appeal was filed by four of these landowners challenging the initial eminent domain proceeding.

Principal underwriters are Credit Suisse, Goldman, Sachs & Co., and JPMorgan. No date has been set for the prospective IPO.

NY Attorney General investigates wind companies

The Office of the New York Attorney General (Andrew Cuomo) announced that it has launched an

investigation into two companies developing and operating wind farms across New York state amid allegations of improper dealings with public officials and anti-competitive practices.

The companies are First Wind (formerly UPC Wind) and Noble Environmental Power, LLC. The AG’s office indicated that is has issued subpoenas to collect documents from the companies because in recent months it

has received numerous complaints regarding the two companies from citizens, groups and public officials in eight counties alleging improper relations between the companies and local officials and other improper practices.

Here for the full press release from the Attorney General’s office announcing the investigation into New York wind developers.

It is important to bear in mind that the initiation of an investigation by the Attorney General equates to neither guilt nor innocence. Noble’s CEO, Walt Howard, issued a statement, saying the company

…will cooperate fully with the Attorney General. We are confident the Attorney General’s inquiry will find that Noble’s actions have been legal and proper and we look forward to his review.

Here for the full Noble statement regarding the Attorney General’s investigation.

New York wind projects

Iberdrola-Energy East

Buffalo News reports June 29 on the likelihood of the proposed Iberdrola-Energy East transaction gaining New York Public Service Commission (PSC) approval (with a vote due potentially July 16, though August appears to be more likely). Notable quote from Iberdrola’s Pedro Azagra:

We believe in predictable and consistent regulation. If those things are not there, there are many other states and countries where it is. If you’re in a state where regulation is not predictable, we’re out of there.

Separately, a variety of outlets (Newsday, Albany Times Union, Ithaca Journal, Business Review) reported that staff of the NY PSC appear to be lessening their demands of Iberdrola to consummate the Energy East acquisition. Willing to permit some ownership of wind generation assets, staff is now insisting that Iberdrola be compelled to make good on its $2 billion investment promise, with penalties for failure to invest the money in New York. The staff in its filing stated

Nonetheless, in the event that the Commission decides approval of the transaction is warranted upon less than tangible monetary benefits in the amount of Staff’s $644 million, or that Iberdrola may own wind generation facilities if vertical market power impacts are mitigated, Staff presents alternatives to the positions it took earlier in this proceeding.

The $2.0 billion investment Iberdrola proposes, and the amount of tangible monetary benefits it must provide ratepayers, can be linked. If Iberdrola commits to the development of wind projects in New York the investments it promises, the amount of the monetary benefits due ratepayers could be reduced. If Iberdrola fails to keep it wind investment promises, however, substantial monetary benefits, in the form of rate reductions, should accrue to NYSEG and RG&E ratepayers.

The Times Union reported that Iberdrola discounted the new staff proposal:

“The PSC staff has not changed its position at all,” said an Iberdrola spokesman. “They make it clear, they still prefer prohibition.” He said Iberdrola believes the alternatives “do not make sense.”

The PSC staff’s latest filing in the Iberdrola-Energy East case may be found on the NY PSC website.

Cape Vincent wind

Watertown Daily Times reports that a group opposed to industrial wind development in the Town of Cape Vincent (Jefferson County) has appealed an appeal judge’s decision to not allow certain documents in the group’s March 2007 Article 78 challenge against the town’s Zoning Board of Appeals (ZBA). The challenge seeks to undo the ZBA’s determination that an industrial wind farm is a public utility under New York law. Such a ruling is advantageous to wind developers as public utilities can be subject to reduced requirements under local zoning laws. The anti-wind group has appealed a lower court’s ruling against it.

First Wind in Prattsburgh

WETMTV online reports on the unsuccessful attempts of landowners to use the courts to prevent First Wind from laying necessary transmission lines for its Prattsburgh project.

NYRI transmission project

The Utica Observer-Dispatch published June 29 a point-counterpoint relating to the proposed New York Regional Interneconnect (NYRI), a 190-mile, 1200 megawatt electrical transmission line from upstate (Marcy) to downstate (New Windsor).

Reunion Power in Richmondville

The Daily Gazette of Schenectady reported July 1 that the Zoning Board of Appeals of Richmondville has decided not to decide yet on whether to grant a one-year extension of Reunion Power’s permit to site a meteorological tower in the town. The company has reportedly sited another met tower just a few miles away.

Spafford Wind Turbine Law

CNYLINK reports that the Town of Spafford in New York’s Finger Lakes region is considering a wind turbine law.

Links in this entry

Digg this article

Wind energy developments: Enfield, Prattsburgh, FERC

Wind Project in Enfield

The Ithaca Journal reports that the attorney for the Town of Enfield (Tompkins County) has raised questions about a proposed agreement between the Town and the developer of a proposed wind farm, John Rancich. The article states that the Town does not have a wind development law in place as a result of the Town Board repealing an ordinance it had on the books.

FERC electricity cost study

FERC released a study prepared by its Office of Enforcement that examines the causes of and responses to rising electricity costs. The report notes that:

For the next few years, wind will almost certainly account for a large share of generation investment and will account for a growing share of overall generation.

Releasing the report, FERC Chairman Joseph Kelliher stated

We must confront three realities: FERC is regulating in a high-cost environment; the United States needs massive investments in new electricity generation, transmission and distribution facilities; and we are beginning to confront the climate change challenge, which puts us in a period of uncertainty regarding policy.

There is tension among these three realities, and they work at cross purposes. The United States cannot simultaneously make the massive investments necessary to assure security of our electricity supply, make additional large investments to confront climate change, and lower electricity prices. Doing so would likely result in failure.

Find here the FERC study on rising electricity costs.

Wind court case in Prattsburgh

WETM-TM reports that the Town Board of Prattsburgh (Steuben County) voted 3-2 to exercise eminent domain, affecting seven land owners, so that First Wind, developing a 36-turbine project, may lay necessary utility cables under a local road.