Benton County Wind Farm LLC. Loraine L. Seyfried Administrative Law Judge Indiana Utility Regulatory Commission

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Elijah Jacobs
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1 Benton County Wind Farm LLC Loraine L. Seyfried Administrative Law Judge Indiana Utility Regulatory Commission

2 Why Wind Energy? More than 9,100 MW of wind power projects are installed in 30 states. This number will increase to approximately 12,000 MW by the end of 2006, with the equivalent of more than 3 million homes being served by wind-generated electricity. INSTALLED MW OF WIND POWER PER STATE Published by the American Wind Energy Association - Updated April 24, 2005 TOTAL INSTALLED U.S. WIND ENERGY CAPACITY: 9,149 MW as of Dec 31, 2005 Graphic: U.S. Installed Capacity, Published by the American Wind Energy Association - December 31, 2005

3 Why Wind Energy? Wind is free and inexhaustible Wind is a widely-available domestic resource Wind energy supports agriculture and rural areas A second crop for farmers due to lease payments for placement of windmills. Generating electricity from wind does not pollute the air or water or emit greenhouse gases Cost of electricity from wind farms is competitive with costs from new fossil fueled power plants Wind is a hedge against continuing increases in the costs of fossil fuels and increasing restrictions on pollution from fossil-fueled power plants

4 Orion Energy LLC Orion s management team has experience in the wind industry going back more than 20 years Prior to founding Orion, Orion s principals were integrally involved in the development, construction and operations and maintenance of wind energy projects in the U.S., Canada, Latin America, Europe and Asia Sister company RDC Development Ltd. in the U.K. RDC recently completed the largest on-shore wind energy facility in U.K. history Projects operating in Texas, Wyoming, and Pennsylvania Additional projects by year end 2007 in Illinois, Oregon, Texas, and Indiana Benton County Wind Farm LLC formed by Orion Energy to own and operate the project

5 Indiana Project Overview Nearly 3 years of project development, engineering, and design 135 wind turbines Up to $350 million investment Approximately 70 landowners Siting consents for all wind turbines and roads Electricity for more than 50,000 homes Project will be built in phases First Phase, up to 130 MW, planned for 2007 Subsequent phases dependent upon market conditions and transmission availability

6 Project Benefits New source of income for approximately 70 landowners More than $20 million in payments over the life of the project Helps preserve farmland and farming Construction jobs Up to 200 jobs at peak of 6-8 months construction period Average of jobs during construction Operations and Maintenance Jobs 8-12 full-time jobs Clean renewable energy Electricity for more than 50,000 homes No air or water pollution No waste disposal problems No depletion of fossil fuels

7 Benton County Wind Farm Project Facilities Wind turbines Tower height up to approximately 265 feet Blade length up to approximately 145 feet Electrical System 34.5kV collection system, substation, transmission line to NIPSCO transmission lines in Newton County Access Roads Operations and Maintenance Building Meteorological Towers Three towers Up to 265 feet tall

8 Components of a Modern Wind Farm Components of a Modern Wind Farm 3 Bladed Rotor Nacelle Hub Tower Overhead Powerline Pad-mount Transformer Concrete Base Underground Elec. Cable Substation Gravel Access Road (Haul Road) Operations & Maintenance Center and Computer Monitoring System

Wind Turbine Blades Feather to change bite out of oncoming wind

9 Modern Wind Turbines Three Movements Nacelle & Generator Typical Dimensions (1) Wind Turbine Weathercocks into oncoming Wind (2) Wind Turbine Blades Feather to change bite out of oncoming wind (3) Wind Turbine Main Rotation generates electrical power (12-20 rpm)

10 Determining Locations for Wind Turbines: A Multi-Step Process Wind Rose Prevailing Direction = SW Wind Energy Map (Darker Blue = More Wind)

Determining Locations for Wind Turbines Zoning

Beams Archaeology Pipeline or Other Easements

11 Determining Locations for Wind Turbines Zoning Requirements: House Setbacks Road Setbacks Noise Setbacks Other Requirements: Environmental Assessment Wetlands Microwave Beams Archaeology Pipeline or Other Easements Computer Optimization, Wake Analysis and Maximum Energy Yield Analysis Landowner Preferences incl. gravel access roads Final Site Plan with Wind Turbine Locations

12 Typical Wind Farm Construction (1) Tower parts arrive at wind farm site. (2) Offloading turbine parts (3) Moving lower section of tower base. (4) Power line construction also begins. (5) Reinforcing steel for tower base. (6) Fitting turbine tower to base. (7) Aerial view of turbine assembly. (8) Raising the rotor. Typical 100MW to 150MW Wind Farm Construction Time is 6 to 12 months Up to 200 jobs at peak of construction Average of jobs during construction (9) Attaching the rotor. (10) Completed Wind Turbine Tower

13 Benton County Wind Farm, LLC Wholesale provider of electricity Although a public utility and subject to Commission jurisdiction, the Commission determined it was in the public interest to decline to exercise jurisdiction over construction, operation, and financing of the wind farm Factors considered in declining to exercise jurisdiction Commission oversight unnecessary Benefits to energy utilities and State of Indiana Promotion of energy utility efficiency Effects on competition with other providers Commission retained jurisdiction to approve any sale of electricity within Indiana

14 Public Interest Review Compatibility with land use and natural resources Transmission interconnection Environmental issues and permitting Necessity for additional generating capacity in Indiana Financing and Management Affiliate transactions Ownership transfers Reporting requirements

15 Duke Energy Indiana s Purchased Power Agreement with Benton County Wind Farm Duke Energy entered into a 20-year Purchased Power Agreement with Benton County Wind Farm for 100 MW Another Indiana utility has recently entered into a similar agreement with Benton County Wind Farm for the remaining 30 MW August 2006, Duke filed for Commission approval of Purchased Power Agreement and for timely recovery of costs through rates December 2006, Commission issued decision approving Purchase Power Agreement and authorizing recovery of costs through Duke s quarterly FAC filing

16 Purchased Power Agreement Fixed price beginning in 2007 Annual price escalation at fixed percentage No demand charge; only energy charge for actual energy produced Duke will own the renewable energy certificates (environmental credits) and will provide the net sale credits to customers Benton County Wind Farm responsible for construction, operation, and maintenance of wind farm Benton County Wind Farm responsible for providing replacement power during protracted outages

17 Duke Energy Indiana Issues Presented to the Commission Duke provided evidence demonstrating the energy produced by Benton County Wind Farm will: Provide needed capacity in its service area Add to diversity of Duke s energy resource portfolio Be economical over the 20 year term based upon market forecast for purchased power and estimated costs to comply with increasingly stringent environmental requirements Be environmentally beneficial Duke also demonstrated that the 20 year term of the Agreement is necessary to finance construction costs Duke proposed to recover the retail portion of purchased power costs through the quarterly FAC filing

18 Commission Findings Wind energy will provide needed capacity and is an economically reasonable addition to Duke s portfolio of resources Renewable and environmentally beneficial energy source Beneficial to economy Terms of Purchased Power Agreement were reasonable Agreement Expected to be economical over the 20 year term Timely recovery of purchased power costs through quarterly FAC filings reasonable

19 Benton County Wind Farm LLC Loraine L. Seyfried Administrative Law Judge Indiana Utility Regulatory Commission

Tilting at Windmills: Wind Power in the Twenty-First Century. October 6, 2012

Tilting at Windmills: Wind Power in the Twenty-First Century October 6, 2012 Tilting at Windmills Wind Tex Energy, LP Developed 4 projects currently in operation in Texas. These comprise 5-10% of current