Oregon’s energy
entrepreneurs and innovations
Keeping the proceeds of power local
THE SITUATION
Renewable or clean energy development has been growing rapidly
in parts of Central and Eastern Oregon, as large wind turbine
farms sprout up. Rural communities see the economic benefits of
some job growth and property tax revenue. But for the most
part, these projects — and the proceeds of the power
sales — are owned by out-of-state investors and energy
developers.
THE INNOVATION
Paul Woodin at Western Wind Power, based in Goldendale, Wash.,
is pushing partnerships between communities in Oregon and
equity investors that would allow the two parties to share the
proceeds of small ($5 million to $25 million) clean-energy
projects, from mini wind farms powering a few thousand homes to
miniature hydroelectric turbines in irrigation canals.
Investors — individuals or energy-oriented backers such
as John Deere Wind Energy — would provide some of project
capital and in return use the tax incentives of equipment
depreciation and state energy tax credits of up to $3.5
million. Local project partners — communities,
electricity cooperatives, farmer cooperatives — would
kick in some financing, potentially using state-backed energy
project loans, and take over ownership of the project from
investors when the tax credits run out after 10 years. The
income comes from selling the power to local utilities or
statewide biggies such as Pacific Power or Portland General
Electric.
Similar combinations of financings and ownership have been
used to fund small wind developments in the Midwest,
particularly in Minnesota. Woodin and several other renewable
energy developers are feeding on some unique tax incentives and
loans in Oregon and the growing interest in renewable energy in
the state. “Washington doesn’t have these tools in
place,” Woodin says, so he’s concentrated here.
DOES IT HAVE
JUICE?
Woodin, a former aluminum plant manager and a project manager
at the large Klondike Wind Farm in Sherman County, says he has
more interested investors than small projects in the Oregon
right now. The key is if they can build the projects to deliver
energy at what the Oregon Public Utilities Commission says is a
cost comparable to new natural gas-fired power plant.
Currently, the cost is set in the
4-6 cents per kilowatt-hour range, which small renewable
projects can’t deliver. Woodin and others have appealed
to the PUC pushing for a rate closer to 8 cents per
kilowatt-hour, which is the projected cost in California and
which he says reflects what new power plants actually cost.
That would make projects he’s working on —
a wind farm in Sherman County and a wood-waste boiler and
small hydro turbines in Hood River County — more
competitive and open them up to power purchases from utilities.
If they can’t get help from the PUC, Woodin and others
say they’ll lobby for more Energy Trust of Oregon funding
for small clean-energy projects as part of energy bills
expected to go to the Oregon Legislature next year. Suffice it
to say, localized clean energy’s future hinges on public
policy.
— Oakley Brooks
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