Aug 17 - McClatchy-Tribune Regional News - Kevin Bonham Grand Forks Herald, N.D.

On Rick Thompson's farm, which straddles the Pembina Escarpment at about 1,500 feet above sea level, nearly constant wind whips the golden heads of hard red spring wheat as if they're pacing impatiently in midair, waiting for the impending late-summer harvest.

"I raise wheat and corn and beans, and I've got wind," said the farmer who lives between Sharon and Aneta, N.D.

Wind. It's long been a four-letter word on the Northern Plains, and especially along ridges that rise above the fertile valleys of the Sheyenne and other rivers in North Dakota.

So, about a decade ago, when a few friends and neighbors in Steele and Griggs counties started talking about how to harness that wind to produce energy, Thompson jumped right in.

"Intellectually, yes. Cash wise? No," he said.

On the horizon

At the time, wind energy essentially was an undeveloped industry, with only a smattering of small wind farms around the country.

Nonetheless, Thompson, Keith Monson and Orville Tranby, rural Cooperstown, N.D., and Keith Jacobson, rural Hope, N.D., pressed on, spending hours talking about how they might turn wind into a cash crop.

Now, their first wind energy harvest is on the horizon.

On Aug. 25, the North Dakota Public Service Commission likely will approve a permit for the Luverne Wind Farm, North Dakota's first large-scale community-owned wind farm.

The farm is owned by M-Power LLC, a locally owned wind resource development company. Its mission is to develop wind generation and associated renewable energy projects that will provide landowners and local investors a chance to share in the profits.

Approval pending

Last week, Otter Tail Power Co. became M-Power's first customer, agreeing to purchase 49.5 megawatts of electricity from Luverne Wind Farm, to be located on 32 sections of land in Steele and Griggs counties in east-central North Dakota.

The wind farm will have a capacity of 157.5 megawatts.

Pending PSC approval, construction of the $315 million wind farm will start this fall. The project is divided into two parts: a 33-turbine farm that will produce the 49.5 megawatts for Otter Tail and an adjacent 108-megawatt farm that will follow.

Company officials hope both will be in operation by late 2009, according to Warren Enyart, M-Power board secretary.

Enyart said M-Power still is negotiating the remaining 108 megawatts of power that will be available once the Luverne Wind Farm becomes operational.

Otter Tail also has a stake, along with Minnkota Power Cooperative, in a 60-mile-long, 230-kilovolt electric transmission line that will be built between Luverne, in southwestern Steele County, to the Maple River Substation near West Fargo, N.D.

"We've been at this for about 10 years now," said Monson, M-Power president. "This is a significant achievement for us, especially to be able to strike a deal with a local utility."

'Something

for ourselves'

The road has been long and winding, with economic and political winds blowing in many directions along the way.

While early discussions about a wind farm took place in 1998, the project really got started in 1999, when local economic boosters organized the Griggs-Steele Wind Development Group, which set up wind-monitoring towers around the region, trying to find the best place for a wind farm.

The group struck development agreements with Enron Wind Corp., a major wind-energy development company based in Houston, then with FPL Energy, a Florida-based wind energy company.

The wind tests showed great potential. But neither partnership worked out. Enron later unraveled in one of the biggest corporate financing scandals in history.

"We thought they were our best sources at the time," Thompson said. "It just wasn't coming together."

"We were a bit premature," Tranby said. "We thought wind was ready at that time. It got our attention, but we couldn't get anybody else's attention."

The group persevered.

"It was into the early 2000s, and we said, 'Why don't we do something for ourselves, instead of for some other company?'?" Thompson said. "Why are we selling our land and our rights to some other company, which their profits will be made on a national scale? We said, 'Let's try to do something for our own community.' Let's find other people who are willing to invest and have partnership in this and who have the heart to take a leadership role."

So, they started investigating a community-owned wind project, one that is owned by a variety of people -- local landowners and investors who sell electricity to utilities, collect lease payments for land used and provide revenue to local governments.

"These guys stayed with the task, worked on collecting wind data, which is a necessary requisite to getting anybody interested in a wind project. You have to prove that you have a good wind resource," said Lloyd Anderson, a Fargo-based consultant for M-Power. "They put together some meetings. They talked to landowners about wind rights and the benefits of wind power to landowners."

They got some help from the Griggs-Steele Empowerment Zone. Steele and a portion of Griggs counties were designated in 1999 as a federal empowerment zone by the Department of Housing and Urban Development. The designation provides tax incentives to help attract new businesses and expand existing businesses.

The empowerment zone funded a small-scale study to determine whether a community wind project would be feasible. Renewable energy was one of one of the zone's six focal points, according to Enyart, the zone's former executive director.

"It was just natural that the Griggs-Steele Wind Development Group bring its resources to the table," he said.

At the time, Iowa had some community wind projects, but they were rare elsewhere in the region. Minnesota, which now has several community projects in operation or in the works, was in the early stages of development, too.

Tax incentives

When Congress approved a federal wind energy tax credit about a decade ago, utilities started to become more interested in the industry's development.

That tax credit has been subject to almost annual debate because it has been approved for short periods of time. The federal tax credit is scheduled to expire again at the end of the year.

Most expect tax credit to be renewed, but they'd like to see it extended for several years at a time, rather than one year.

"If it goes off, the industry dies," Tranby said. "The tax credit is economically driven. It makes sense."

At least 27 states now have some kind of incentives to encourage wind energy development, according to Anderson.

North Dakota has tax incentives for wind energy development. But those incentives do not promote local ownership of wind farms. Other states in the region, including Minnesota, Iowa and Nebraska, have strong incentives to promote local ownership of wind farms, according to Anderson.

"The cost of wind energy has been coming down rapidly the last 10 to 20 years, to the point where, at least with the incentives, we can look at it with other new forms of energy," Anderson said.

"It's also a quick way to add more energy into the system. Other forms of energy -- oil, coal -- take years of development to get into production," said Tim Brakke, rural Aneta, who also serves in the M-Power board.

Modest beginnings

M-Power was organized in 2006 by the Griggs-Steele Empowerment Zone and the Griggs/Steele Wind Development Group.

The group contracted with a company called Wind Energy Development LLC to do the study. That company, now called National Wind LLC, is a partner and consultant in M-Power's wind farm development.

"These are typically intermediate-, to long-term projects. They don't happen overnight," Anderson said. "It takes a tremendous amount of effort and work to put it together. Without strong, local leadership being available to shepherd the process along over time, it simply doesn't happen."

Today, M-Power has about 145 investors, including 75 landowners who have land in the wind farm footprint, which spreads over 32 sections of land in western Steele and eastern Griggs counties. About 70 stockholders are investors, the majority of them local, who have paid cash to be part of the business.

Currently, stock is selling for $45 a share or unit. A minimum investment is 100 units, or $4,500. Some shareholders have invested more than $100,000 each.

Ultimately, local developers believe Griggs and Steele counties have the potential of 400 to 500 megawatts of wind energy.

At this point, transmission is one of the key hurdles M-Power investors and wind energy developers throughout the Northern Plains face as the industry progresses tries to grow.

"Long term could very well be 10 years because it takes a while to build transmission," Anderson said. "Without transmission, you can't build anymore wind farms. North Dakota already produces more energy than we can consume in the state, so the incremental additions to the energy production in North Dakota need to be exported."

"The wind energy industry in North Dakota supposedly is growing by leaps and bounds. But it really isn't," Tranby said. "Most of those projects proposed now will never get built because they don't have a source to sell their energy. We have to get it out of here. If we can't get it out of here, it's going to stall."

Thompson doesn't live within the wind farm footprint. No wind turbines will be built on his land, at least in the present project. But as an investor, he and others like him expect to profit from this new cash crop.

"We've got a resource that, I think, is equivalent to North Dakota oil and North Dakota coal," Thompson said. "Why not? We need energy. We got this map from the National Renewable Energy Lab in Golden, Colo., that shows the west side of the Red River Valley has a tremendous asset, and here we sit right dab in the middle of it."

Besides, his land could be targeted some time in the future, as wind energy development continues to grow in the region.

"The goal is to see more economic development in this area, to see some money come back into the area," Brakke said. "We have individual investors and landowners who hope to actually make some money with this."

Reach Bonham at (701) 780-1110; (800) 477-6572, ext. 110; or send e-mail to kbonham@gfherald.com.

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