PORTALES, N.M. -- Aug 18 - Knight Ridder/Tribune Business News - Rosalie Rayburn Albuquerque Journal, N.M.

Enormous energy expenses are pushing a Portales peanut processor into the power business.

And economic developers and state officials hope the project inspires other agricultural producers and rural small businesses to do the same around New Mexico.

Jimmie Shearer, president and CEO of Sunland Inc., has begun the process to fund and locate a wind turbine on the grounds of his plant to help reduce the annual cost of electricity, which is about $250,000 from the Roosevelt County rural electric cooperative.

Sunland uses electricity to clean, dry and grind or package about 54 tons of locally grown peanuts a year. It ships the packaged nuts and peanut butter to customers throughout the United States and to Spain and Japan.

"We have huge electric bills every month," Shearer said.

Those bills have jumped in recent years because of the higher prices utilities have to pay for natural gas to generate power.

Shearer said he believes a possible solution is blowing all around him.

Sunland is located on the windy plains of eastern New Mexico, about three miles northeast of Portales. There are currently three wind farms within 60 miles of Sunland: 80 turbines at San Jon, near Tucumcari; 136 turbines at House, near Fort Sumner; and an 80-turbine wind farm being built at Elida, about 25 miles southwest of Portales.

"I just saw some of the other wind turbine projects going up, and the payback time, and thought it might work," Shearer said.

He said he has estimated the cost at about $1 million to erect a wind turbine capable of generating enough power to come close to meeting his needs. He said he plans to take advantage of federal and state incentives to cover part of the cost.

Sunland has applied for a $200,000 grant from the U.S. Department of Agriculture, which has several million dollars available for agricultural producers and rural small businesses to purchase renewable energy systems. He doesn't know yet if or when he will receive the grant money.

A federal law that allows accelerated depreciation on wind turbines would let Sunland offset its investment by paying less federal tax. Sunland could also take advantage of a 1.9 cents per kilowatt-hour federal tax credit and a 1 cent per kilowatt-hour state tax credit for the wind power it produces.

"It takes all of these things to make it even close to being a viable project," Shearer said.

Renewable energy proponents and local government groups are eager to encourage small-scale wind projects like Sunland's because they can deliver power directly to the user. Utility-size wind farms need large power lines to transport their electricity. And eastern New Mexico needs more power lines before it can accommodate another large wind farm, they say.

The Eastern Plains Council of Governments, a nonprofit organization that coordinates planning for regional needs, hopes Sunland will become a model for other community-based wind projects, said Lee Tillman, the agency's executive director.

The agency recently began a wind conditions study at Sunland to determine what type of wind turbine will most effectively meet the companies' needs.

Funds for the testing came from a $59,000 clean energy grant from the state Energy Minerals and Natural Resources. The Legislature in 2004 appropriated $1 million in funding for grants for renewable energy projects.