Final Report for Harvesting a New Wind Crop: Innovative Economic Approaches for Rural America

Abstract

Final Report for ''Harvesting a New Wind Crop: Innovative Economic Approaches for Rural America'': This project, ''Harvesting a New Wind Crop'', helped stimulate wind development by rural electric cooperatives and municipal utilities in Colorado. To date most of the wind power development in the United States has been driven by large investor-owned utilities serving major metropolitan areas. To meet the 5% by 2020 goal of the Wind Powering America program the 2,000 municipal and 900 rural electric cooperatives in the country must get involved in wind power development. Public power typically serves rural and suburban areas and can play a role in revitalizing communities by tapping into the economic development potential of wind power. One barrier to the involvement of public power in wind development has been the perception that wind power is more expensive than other generation sources. This project focused on two ways to reduce the costs of wind power to make it more attractive to public power entities. The first way was to develop a revenue stream from the sale of green tags. By selling green tags to entities that voluntarily support wind power, rural coops and munis can effectively reduce their cost of wind power. Western Resource Advocates (WRA) and the Community Office for Resource Efficiency (CORE) worked with Lamar Light and Power and Arkansas River Power Authority to develop a strategy to use green tags to help finance their wind project. These utilities are now selling their green tags to Community Energy, Inc., an independent for-profit marketer who in turn sells the tags to consumers around Colorado. The Lamar tags allow the University of Colorado-Boulder, the City of Boulder, NREL and other businesses to support wind power development and make the claim that they are ''wind-powered''. This urban-rural partnership is an important development for the state of Colorado's rural communities get the economic benefits of wind power and urban businesses are able to claim the environmental benefits. The second method to reduce the cost of wind power we investigated involved access to cheap capital. Municipal utilities and rural electric cooperatives have access to low-interest loan programs and frequently finance projects through the sale of revenue bonds, but we were interested in the possibility for small businesses and community banks to provide equity and debt for wind projects. We worked with Boulder Community Hospital to explore their interest in partnering with other businesses and individuals to help catalyze the first community-owned wind project in Colorado. We also met with and gained interest from the independent community banks for the idea of wind power. These small banks may be restricted by lending limits, but are an integral part of rural communities and are very interested in the economic development opportunities wind power presents for small towns. This project was successful in getting six rural electric cooperatives and municipal utilities to purchase more than 25 MW of wind power in Colorado, Wyoming and Nebraska. These utilities also announced plans to explore an additional 100 MW or more of wind power development over the next few years. Finally, munis and coops in New Mexico began exploring wind power by offering small green power programs to their customers. WRA believes the lessons learned from this project will assist other municipal utilities and rural electric cooperatives as they develop wind projects.