Communities investing in wind farm
By John Laidler, Globe Correspondent / August 3, 2008
Wind turbines atop a mountain in the Berkshires could soon help four area communities meet their power needs.
Municipal utilities in Ipswich, Marblehead, Peabody, and Wakefield, along with those in 10 other communities, recently teamed with a nonprofit corporation to acquire the assets of a planned 15-megawatt wind farm on the summit of Brodie Mountain in the western Massachusetts town of Hancock.
The wind farm, the first in the state to be owned collectively by a group of municipal utilities, would provide enough power to supply 6,000 homes, according to the Massachusetts Municipal Wholesale Electric Co., the nonprofit that is partnering with the local utilities.
"It's a small percentage of the power supply for these municipal utilities. But it's significant because it helps diversify their power supply," said MMWEC spokesman David Tuohey. "You are just better protected from spikes in the cost of oil and natural gas.
"We are projecting that the costs of power from the project will be below the market price of power," he said.
While there are no estimates on how much they might save, municipal utility officials said the potential financial benefit was a key factor in prompting them to invest in the mountaintop venture, known as the Berkshire Wind Power project.
If all goes well, the turbines will be in operation by late 2010. The power produced will be supplied to the regional power grid, with each municipal utility earning energy credits based on their share of the power.
"The economics of this project work very well and will result in what we anticipate will be a very economical source of energy for our consumers," Peabody Municipal Light Department general manager William F. Waters said of the Berkshire project, which calls for 10 turbines, each producing 1.5 megawatts.
The desire for clean, renewable energy also appears strong.
Consumers "have wanted us to pursue renewable projects. I get calls every week about what are we doing in Marblehead," said Robert Jolly, general manager of the Marblehead Municipal Light Department.
The Berkshire project is benefiting other wind power ventures, in Ipswich and the central Massachusetts town of Templeton. Ipswich plans to build a 1.5-megawatt turbine at the end of Town Farm Road, near the former town landfill. Templeton plans a 1.5-megawatt turbine at Narragansett Regional High School.
The Berkshire Wind Power Cooperative, the entity formed by the 14 municipal utilities and MMWEC to acquire the Brodie Mountain project, has included the Ipswich and Templeton projects in the request for proposals it was set to issue this week for the purchase of its 10 wind turbines.
While Ipswich and Templeton are financing their own projects, Ipswich utilities director Tim Henry said his town expects to secure a favorable price for its turbine by having it bid with the larger Berkshire project.
The municipal involvement in Berkshire began in 2005, when MMWEC entered into an agreement with then-project owner Berkshire Wind Power LLC to buy all the power from the future wind farm and contracted with the 14 utilities to supply it to them.
Then last year, MMWEC and the municipal utilities learned of an opportunity to purchase the project assets, Tuohey said. The utilities and MMWEC formed the cooperative, which secured an $8 million short-term bank loan to cover the $4 million purchase price, a down payment on the turbines, and other costs.
The purchase of the assets, which include easements, permits, agreements, engineering documents, and other items, took place June 12.
Tuohey said that the cooperative is now seeking long-term financing to pay for the overall project, expected to cost $45 million total. The 14 utilities will cover all debt repayment, with MMWEC contributing technical and financial help.
Peabody is the largest investor, with an 18.1 percent share. Wakefield's share is 9.1 percent, Marblehead's 6.7 percent, and Ipswich's, 6.4 percent.
"In the current energy market, it's important to be diversified," said Peter Dion, general manager of the Wakefield Municipal Gas and Light Department, estimating the Berkshire project will meet about 2 percent of the town's 50-megawatt power demand.
Jolly said Marblehead expects to meet about 2 percent "or better" of its energy demand through the wind project, adding potential price increases for electricity generated through oil and gas resulting from the Regional Greenhouse Gas Initiative - an effort by Northeast states to reduce carbon emissions - could further enhance wind's economic savings.
Henry, Ipswich's utilities director, said "There is strong support for renewable energy in Ipswich."
The town's own turbine project was approved by a 4-to-1 ratio at the town election in May. The School Department is covering $1.6 million of the cost with a zero-interest federal loan, with the Municipal Light Department funding the remainder of the estimated $4 million project from its rates. The turbine is expected to be in operation by the fall of 2010.