A community-based wind farm would be a cash cow for the community.
That was the message at a meeting Thursday night at the Arkport Central School Performing Arts Center, arranged by Hartsville resident Steve Dombert. Dombert was initially opposed to any wind farm coming to Hartsville, but is now urging the town board to look at a community-owned project.
With the help of Rochester billionaire B. Thomas Golisano; Ed Rechberger, Perry community-based wind farm leader; and Keith Pitman, a utility engineering specialist, Dombert organized the meeting to present an alternative to a wind farm constructed by Ireland-based Airtricity. The Hartsville town board has approved the Steuben County Industrial Development Agency to act as lead agency in PILOT negotiations with the company.
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With companies like Goldman Sachs, JP Morgan and Florida Power and Electric behind other projects in the state, Golisano said communities should try to develop its own projects.
“Why should we give it away?” he said. “Why should we let companies reap the reward of our wind?”
“Why not develop it and harvest it ourselves?” Golisano added.
According to the figures presented, a 2 megawatt turbine costs about $3 million to construct, which would result in approximately $90,000 in taxes per year for each turbine. With Payments in Lieu of Taxes agreements, Golisano said, the owners do not have to pay property taxes.
“The PILOT being offered compared to property taxes is much smaller,” he said.
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The $3 million per turbine includes the purchase of the turbine, construction, road work, legal costs, and any other costs that would be incurred, Golisano said. He then outlined the estimated annual revenue per turbine at $575,000 - $375,000 for sale of the electricity produced, $100,000 from the federal power tax credit and $100,000 from the New York State Energy Research and Development Authority.
As for other costs, Golisano said the average maintenance cost - which includes land lease costs - would be $50,000 per turbine, giving each turbine a $525,000 pre-debt cash flow. The debt service on each turbine would be about $400,000 per year.
“Let's assume that the turbine is an asset like a house which has a mortgage,” Golisano said. “The $3 million turbine will be paid for over 10 years that - with interest - would be approximately $400,000.”
Based on those figures, the after debt cash flow would be $125,000 per turbine for the first 10 years.
“Multiply that by 30 (turbines) and it's almost $4 million per year,” Golisano said, “but things get really interesting in year 11.”
After 10 years, he said, the debt service would be paid off, and the power tax credits and NYSERDA grants would be done, leaving the revenues at $375,000 for the sale of power. Figuring in an increase in maintenance costs to $75,000 would bring in about $300,000 per turbine per year after year 10, Golisano said. The estimated figures were developed using current costs and prices, he added.