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White Lake listens to wind farm proposal

If state and federal permits are approved, the Basin Electric Power Cooperative project will begin construction this summer and begin commercial operation in winter 2011.

Basin Electric Power Cooperative - March 1, 2010

Originally published in The Daily Republic
Reported by Ross Dolan

Pickups lined White Lake's Main Street Monday as area residents turned out for a Public Utilities Commission hearing on a $350 million wind farm that could forever change this city of 405.

Most of the estimated 125 people who filled the city's American Legion hall were there not to comment, but to listen and to learn more about PrairieWinds SD 1, a 151.5-megawatt wind farm north of White Lake near Crow Lake. If state and federal permits are approved, the Basin Electric Power Cooperative project will begin construction this summer and begin commercial operation in winter 2011.

Early applications considered a site in Winner as well, but a Basin Electric spokesman said Monday that Crow Lake is now the preferred site. Crow Lake is north of White Lake and the project would spread over parts of Aurora, Jerauld and Brule counties.

More than 100 wind turbines are planned.

The project is huge for his town, said one local official.

"I compare this project to Interstate 90," said White Lake Mayor Russ Ehlers. "It's something that's going to impact our community for the rest of our lives."

Hosted by the state Public Utilities Commission, the hearing was a required part of Basin Electric Cooperative's application to operate a wind farm.

The event was also attended by Public Utilities Commissioners Dusty Johnson, Gary Hanson and Steve Kolbeck. Johnson served as the panel's moderator. Basin Electric's presenters were Ron Rebenitsch, project manager; Kevin Solie, senior environmental analyst; and Russ Mather, project attorney.

Rebenitsch was unable to give Darin Gillen of White Lake a solid estimate on gross receipts from electricity generated by the wind farm. The project should generate about 6 million kilowatts per year, he said, but that capacity will be mixed with electricity generated by coal-fired plants and other sources. He said the cost of the project, however, will average about 6 cents per kwh.

He said the project will begin hiring about 10 to 12 full-time workers next summer. Those jobs will have a $550,000 annual payroll, plus benefits, he said.

Dennis Beckman, a Jerauld County resident, asked about lease proceeds.

Those rents have been estimated to be around $4,000 per site per year, but Rebenitsch did not confirm that amount. He said the contract amount will rise 2 percent each year during the 50-year term of the agreement. A construction payment equal to one year's rent also will be paid, he said. Per-acre payments and other easements also have been paid.

Beckman also asked how the estimated $500,000 in taxes generated by the project in the first year will be distributed among the three counties.

The panel was not certain about the operation of the tax distribution mechanism.

State tax officials said last week, however, that wind projects are taxed by nameplate capacity annually at the rate of $3 per kilowatt hour - or roughly $450,000 for 150,000 kilowatts - and that money goes to schools and local government.

There is also a tax on electricity produced. Twenty percent of those taxes eventually will go to the local government and 80 percent to the state property tax reduction fund, minus rebate money deducted during the first 10 years of operation.

David Lambert, director of regional development for the Dakota Heartland Development Association, urged swift approval of the PUC permit application. He said the project will create jobs for the community and for students being trained as wind technicians at Mitchell Technical Institute. He said it has created a buzz in all the communities he serves.

Harold Hotchkiss of Wessington Springs asked about the usable life of the turbines.

Rebenitsch said the design life of the turbines is 25 years, but they could run indefinitely with good maintenance.

Wessington Springs School District Superintendent Lance Witte said that a change in ownership of the Wessington Springs wind farm in his district has delayed the receipt of tax money for about two months.

"We haven't seen any funds yet, but we anticipate that about $75,000 a year will come to the school district from those 34 turbines," he said.

Rebenitsch said at least seven turbines could be owned by Wind Partners LLC, a private investment group.

Secretary of State Chris Nelson, who owns land on the wind farm site, asked which entities formed the components of Wind Partners LLC.

Rebenitsch said about seven turbines would be owned by the South Dakota Corn Growers, the Farm Bureau, the Farmers Union, and various electric cooperatives. He declined to say more at this time about the investment group.

While the original project amount was advertised at $300 million, Rebenitsch said the project's budget is now $350 million.

Rebenitsch said Basin Electric has finalized a construction contract with Wanzek Construction of Fargo, N.D., but he declined to give the amount of the construction contract. He did say that about 70 percent of the wind farm's costs will be for its 1.5 megawatt General Electric wind turbines, which run about $3 million each, he said. The remaining 30 percent will be used to build the 101 to 111-unit wind farm and for associated costs.

In post-meeting comments, PUC Commissioner Gary Hanson said his organization frequently receives negative input from communities protesting rate hikes and the like.

"This community certainly looks at this from the standpoint of good news, and we had folks from all over the affected counties here tonight who were articulate and presented excellent information. I think the hearing went perfectly," he said.

American Legion Commander Lamont Cain reflected the feelings of many after the meeting.

"I love the whole idea. As far as I'm concerned they can give their approval and start tomorrow," he said.

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