Wind Farm Waiting on Tax Credits

Wind Farm Waiting on Tax Credits

Aug 03 - Pantagraph

ARROWSMITH -- A patchwork of corn and soybean fields in eastern McLean County could sprout into the nation's largest wind farm within the next year or two.

Area residents could see 405-foot metal towers towering over 22,000 acres stretching from Saybrook to Arrowsmith to Ellsworth. About 250 to 260 turbines planned for the Zilkha Renewable Energy wind farm could generate enough electricity to power 120,000 homes annually.

Officials at the Texas-based Zilkha proposed the wind farm in 2002. It's taken this long to assess wind speed, consistency and availability as well as study bird movement and other environmental issues. They must still secure agricultural special use permits from the county to install towers.

"Wind farms can't go just anywhere. You have to have wind, transmission lines near the site, community support, patience, capital and a power buyer," said Joe Romano, Zilkha chief executive officer. "We have everything in place but a buyer. We need production tax credits, or the buyer will have to spend more money. That will be a problem."

The federal energy bill contains tax credits for wind energy producers amounting to 1.8 cents per kilowatt hour for 10 years of operation. Congress has not approved the bill.

Uncertainty of the tax credits causes wind energy developers to hesitate spending millions of dollars on production farms, Romano noted. The company has spent more than $1 million already in studies and other development costs not knowing whether the Arrowsmith wind farm will become reality.

"I give the farm an 80/20 chance of being built," said Bob Crowell, Zilkha business development director. "If we had a power buyer, I'd give it an even better chance."

The company signed an agreement to transmit electricity generated by the wind farm via ComEd transmission lines near the farm. ComEd officials have not agreed to buy the electricity.

Officials of some smaller electrical utilities have said that wind-generated electricity cannot be plugged into existing transmission lines without significant and expensive upgrades. Others, including ComEd, are concerned that wind does not supply a steady stream of electricity.

Romano agreed that wind energy is an intermittent power source. He noted that it's meant as a supplement to existing energy sources.

Two years of wind monitoring showed average wind speeds of more than 17 mph at the Arrowsmith site.

That means the turbines could generate electricity 91 percent of the time. Winds blowing 3 mph to 5 mph cause blades on wind turbines to turn. Winds of 6 mph to 9 mph can generate electricity.

If Zilkha can find an energy buyer, construction likely would begin in 2005. The project would provide 200 to 250 construction jobs over six to nine months.

Plans involve installing turbines on acreage leased from 130 landowners. The 400 megawatt project costing $500 million likely would be completed in two stages. Landowner lease payments would total about $1 million per year, with another $1 million paid by the company for property taxes.

Houston-based Zilka was founded six years ago by a father-son team formerly in the gas and oil exploration business. They sold their oil business to enter the renewable energy industry because it was becoming increasingly difficult to find hydrocarbon-based energy sources. The company is active in 12 states with six wind farms operating in Oklahoma, Pennsylvania, Iowa and Costa Rica

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