Community-Based Energy Development in Practice:

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Community-Based Energy Development in Practice:

Community-BasedEnergy Developmentin Practice:Lessons Learned andBest PracticesAWEA WINDPOWERDallas, TexasMay 26, 2010Authored by:Co-Authored by:Ryan Harry, BCSMichele Suddleson, APPA/DEEDJames Browning, BCS


What is C-BED?• C-BED is Community-Based Energy Development• C-BED ensures that a certain amount of revenuefrom electricity production is kept within the stateSuzlon Turbines in Minnesota, courtesy of Suzlon


What is C-BED? continued• Local investors can getinto the wind game withfront-loaded pricing• Front-loaded pricingensures a growingamount of net cash• NPV of pricing is keptconstant over a 20-yearPPA to enable frontloadingSource: C-BED.org, http://www.c-bed.org/net_present_value.html


Minnesota and Nebraska C-BED ProjectsMinnesota• Mountain Lake, 1.3 MW• Wing River, 2.5 MW• Marshall, 14.7 MW• Cisco, 8 MW• Edw ington, 20 MW• Odin, 20 MW• Brew ster, 2.1 MW• Welcome, 2.1 MW• Jeffers, 50 MW• Hilltop, 2 MW• Willmar, 4 MW• Uilk, 4.5 MW• Total, 131.2 MWNebraska• Elkhorn Ridge, 80 MW• Crofton Hills, 40 MW• Total, 120 MWSource: APPA, Public Power Investments in WindSource: MN Office of Energy Security, “C-BED Project List”Turbine at Elkhorn Ridge Project, courtesy of Edison Mission


C-BED in MinnesotaElectricityRatePreferenceAggregationQualifyingOwnersOwnershipLimitsOwnershipTransferLocal RevenueNon-qualifyingFront-loaded 20-year NPVUtilities must consider C-BEDprojects during IRP and reportannuallyAggregation is encouragedMN resident, LLC company,nonprofit, cooperative, politicalsubdivision, local governmententity, tribal council15% of ow nership on projects ofthree or more turbinesCannot be transferred to a nonqualifyingow ner in first 20 yearsAt least 51% of revenuesNo more than 49% of revenue216B.16122006Updates to216B.16122007


C-BED in NebraskaL.B. 6292007L.B. 9162008L.B. 5612009ElectricityRatePreferenceAggregationQualifyingOwnersOwnershipLimitsOwnershipTransferLocal RevenueNon-qualifyingOtherNegotiated rateAnnual summary of efforts topurchase C-BED electricityAggregation is encouragedNE residents, LLC companies,nonprofit, electric supplier (max25%), tribal council15% of ow nership on projects ofthree or more turbinesCannot be transferred to a nonqualifyingow ner in first 10 yearsAt least 33% of revenuesNo more than 67% of revenueRemoves eminent domain; C-BEDprojects exempt from sales tax


Importance of C-BED to Public Power• Not specifically importantto public power utilities inMinnesotaSuzlon Turbine in Minnesota, courtesy of Suzlon• Important for public power(all) utilities in Nebraska:– Allow s private w inddevelopment w ithin Nebraska– Allow s public pow er utilities toaccess the PTC– Provides developers w ith asales tax incentive– Led to additional legislation thatw ill low er electricity supplycosts for utilities and theircustomers


C-BED Benefits1. Landowners may receivemore money and play agreater role2. Furthers the discussionof other developmentmechanisms3. Gives public powerutilities access to thePTCTruck Hauling Blade at Odin Project, courtesy of Geronimo Wind4. May lead to an increasein local wind expertise


C-BED Challenges1. C-BED legislation is toonarrow2. It is difficult to find localinvestors with thenecessary tax appetite3. C-BED may subject localinvestors to unnecessaryfinancial risksEwington Turbine Fire, courtesy of Worthington Daily Globe


Suggestions for Improvement1. Allow flexibility in the amount of revenue that mustflow to the local community2. Find a way to better aggregate individual residents3. Better understand risks that small utilities and localowners are subject toMarshall Wind Project, courtesy of Geronimo Wind


The Bottom Line• Energy developmentcontracts must be structuredto best meet the needs of allparties involved• Landowners involved withwind must consult expertsto achieve the best possiblecontract• C-BED legislation has kickedoff an effort to spur winddevelopment whileprotecting local interestsWillmar Municipal Utilities Turbine, courtesy of WMU


Special Thanks to All Who Contributed• John Brown, NexGen Energy Partners• Earl Cummings, Turning Point Management• Charlie Daum, Geronimo Wind• Mike Donahue, Midw est Wind Energy• Senator Cap Dierks, State of Nebraska• Charles Newcomb, NexGen Energy Partners• John Richards, Nebraska Public Pow er District• Stephanie Savage, NexGen Energy Partners


For Further QuestionsRyan HarryBCS, Incorporated303.425.6800 x462 orrharry@BCS-hq.comJames BrowningBCS, Incorporated410.997.7778 x224 orjbrow ning@BCS-hq.com

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