Horizon Wind Energy has completed for a new 300-megawatt wind farm in the Grande Ronde Valley in Oregon. The public now has an opportunity to weigh in on the application, which seeks approval for up to 164 wind turbines to be constructed in Union County.

A final application for site certificate for the Antelope Ridge project was submitted to the Oregon Department of Energy on Dec. 30, 2010. Opinions on the how beneficial the project will be to the community of Union County are split. A non-binding advisory vote last November asked whether citizens approve of the new wind farm; 52 percent of voters are against the project and 48 percent are in favor.

A public information session on the wind farm will be held Jan. 25 in Union County followed by a public hearing where comments will be taken by the Oregon Department of Energy. The time and date for that hearing have not yet been determined, according to Diana Enright, communications manager for the Oregon Department of Energy.

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A $40 million property tax and fee has been struck between Horizon Wind Energy and Union County for Horizon’s proposed Antelope Ridge Wind Project, according to county commission chair Mark Davidson.

The agreement is based on the state’s Strategic Investment Program and will give Horizon a property tax break on the land being used for the project. Though Horizon gets a tax break in the agreement, Davidson said it is beneficial to the county. If Horizon were to be taxed the full amount, which would be around $50 million, only six taxing districts within the county could use the money. Under the program in the agreement, the county could use the $40 million in more places for more uses, Davidson said. The $40 million would be paid over the life of the project, estimated at 15 years.

“As we more fully explain the benefits of this program, our community may better understand the benefits this project could have,” David son said. “The SIP would keep more revenue within the county. I’m very satisfied with the content of the agreement and I don’t expect any changes to be made.”

Voters were almost evenly divided on a recent ballot measure asking whether residents support the proposed Antelope Ridge Wind Farm, a 300-megawatt project that would build up to 164 turbines in the Grande Ronde Valley. While 5,462 voters said they oppose the project, 5,060 voted in support of the project.

The end results of the ballot measure will be reviewed by the state’s Energy Facility Siting Council, but Union County doesn’t have the authority to deny or approve the project, Davidson said.

Public testimony on the $40 million agreement will be taken at a meeting Nov. 10 in Union County. After that, the Union County board of commissioners will vote whether to approve the agreement. Final approval will come from Oregon’s business development commission.

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An Eastern Oregon community is divided over a proposed wind development in the Grande Ronde Valley. Proponents say the wind farm could bring jobs and money to the struggling community, but a vocal group of residents say wind farms are unsightly, loud and ruinous to the landscape and wildlife.

Related:

• Poll: Should a new wind farm be built in the Grande Ronde Valley?
• Video: Hideous or graceful? Union County split over look of wind turbines
• Story: Wind War in Union County

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A divided community in Eastern Oregon weighs in on a developer’s plan to build as many as 164 more wind turbines.

Related:

• Poll: Should a new wind farm be built in the Grande Ronde Valley?
• Photo slideshow: Images from Union County
• Story: Wind war in Union County

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» Video: Hideous or graceful? Union County split over look of wind turbines

» Photos: More images from Union County

A storm is brewing in the Grande Ronde Valley, and it’s about to get windier.

After the success of its project near the tiny community of Telocaset, developer is looking to add as many as 164 turbines to the foothills of this windy valley. But the 475-foot-tall turbines have divided the sparsely populated county.

The is unique because it is one of only a few Oregon valleys surrounded by mountains. It’s also one of the state’s windiest areas, according to Valerie Franklin, project manager with Horizon Wind. The rolling mountains nestled between the Grande Ronde and Baker valleys also mean strong winds during winter – when turbines lining the Columbia River Gorge aren’t turning.

But despite its rich natural resource, Union County is suffering. Its 10.5 percent unemployment rate is comparable to the state average, but its 15 percent poverty rate is higher. With more farms and timber mills closing each year, some residents feel a few jobs and more tax revenue justify the addition of turbines on the county’s mountains.

Others, like Dennis Wilkinson, president of anti-wind group , say wind farms are ruining the valley by introducing roads, noise and red, blinking lights, while bringing in little money and few jobs. Wilkinson and 200 group members have launched an aggressive campaign complete with flyers, county fair booths and ample anti-wind signage to try and sway residents away from wind.

Anti-wind, anti-tax

Vintage tractors cover Wilkinson’s property, tucked into a hillside that could soon see more turbines. A retiree, he spends his time tinkering with heavy machinery, but lately he’s taken up a new hobby: fighting development of wind turbines in Union County.

While some members of his group decry the turbines for scaring away wildlife and scarring the landscape, Wilkinson was driven to start the group for another reason: money.

“These wind companies are using federal and state subsidies to build these things,” Wilkinson said. “Guess what? It’s being paid (for) with your tax dollars.”

Horizon received $11 million in state to build Elkhorn Valley, an amount Wilkinson said is significant when compared to the number of jobs created and the amount of tax revenue the county has received in return. According to the Oregon Department of Revenue, Elkhorn Valley accounted for 9.3 percent of Union County’s total property tax revenue between 2008 and 2009. Currently, Elkhorn Valley employs 12 employees to maintain the turbines and three Horizon employees to operate the wind farm. With changes to the BETC, Franklin said she isn’t sure if Horizon will receive any state subsidies for Horizon Wind’s proposed new wind farm, .

Plus, Wilkinson said, his county now has visual pollution of turbines generating electricity that goes to other states.

That’s only half true, Franklin said. Though Horizon has a power purchase agreement with Idaho Power, that utility has customers in Oregon. Union County’s largest town, La Grande, is about a two-hour drive from the Idaho border. The problem, according to Mike Hulse, Elkhorn Valley operations manager with Horizon Wind, is that people don’t understand how power is generated and transmitted back to homes.

“There’s no passing lane on a power line,” Hulse said. “The power goes where the demand is, whether it’s in Idaho or right here in Union. But people only know what they hear, which is that the power we generate here goes somewhere else.”

The final sticking point for Wilkinson is the ratio of power generated to acreage used. Elkhorn Valley covers 10,000 acres, and Antelope Ridge would cover 47,000 more. Wilkinson’s group claims in its promotional materials that the turbines operate at 10 to 20 percent efficiency. Elkhorn Valley could produce 101 megawatts of electricity annually, but only if the wind blew all day, every day. A wind farm’s efficiency is determined by how often winds blow.

Though Franklin said Elkhorn Valley’s energy output is confidential, she said it was close to 30 percent on average, or 30.3 megawatts. If Antelope Ridge were to perform equally well, it would produce 90 megawatts on average.

“I’d rather see another 10-acre natural gas plant than 47,000 acres of wind turbines,” Wilkinson said. “A gas plant being built in Idaho right now only costs $400 million. This new wind farm will cost $600 million and will still need a coal or gas plant to back it up.”

Local farmer and wind advocate Doug Lewis says Wilkinson is wrong about the need to build a new coal or gas plant for every wind farm in the state. The only new gas plant being considered is one to replace Portland General Electric’s Boardman facility when it is shut down in the next 20 years.

“The opposition is anti-tax, anti-government and anti-growth,” Lewis said. “I think it comes down to viewsheds and property values for most of them. There are red, blinking lights on Queen Anne Hill in Seattle, too, but that doesn’t stop people from buying houses there.”

Wilkinson’s group notched a small victory last month after the Union County Board of Commissioners voted to allow residents to weigh in on Antelope Ridge on the November ballot. The results of that vote will be considered public testimony by , according to Oregon Department of Energy spokeswoman Diana Enright. The council, which is the governmental body that decides where energy facilities should be developed in Oregon, will have the final say on whether Antelope Ridge moves forward.

At the August hearing to decide whether the community should vote on the proposed wind farm, 106 people showed up to testify: 53 spoke in favor of the farms and 53 spoke against them.

Growing a new crop in Union County

Fifteen new jobs and income for struggling landowners in Union County aren’t small potatoes for Lewis, a North Powder farmer and member of the pro-wind group . To him, turbines are no more harmful to property than his potato farm.

“I can grow any crop I want, yet these people are being called out for siting turbines on (their property),” Lewis said. “That’s like someone telling me they don’t like the color of flower crops I’m growing. These developers and landowners should have the opportunity to grow these projects here.”

According to Lewis, some of his neighbors who have allowed turbines to be sited on their land are earning upwards of $1.5 million per year from Horizon. What the anti-wind farm group doesn’t recognize, Lewis said, is the trickledown effect of landowners having more disposable income. More money will be spent locally on new cars, home improvements and other services, Lewis said.

Frustrated by what he said is misinformation distributed by wind farm objectors, Lewis recently joined For Our Rural Oregon. One of the largest pieces of misinformation, Lewis said, is that Elkhorn Valley did not create local jobs. Fourteen of the wind farm’s employees are local residents. Only Hulse, who relocated from California, came from outside the area.

Nine years ago, Shane Kirkland, who grew up near North Powder, had no college degree and was working in a trailer factory. Today, he is a Vestas employee and part of Elkhorn Valley’s senior management. With local timber production down 4 percent from 2009 and 225 people out of work after the trailer factory closed, Kirkland says even the few jobs these wind projects provide are necessary for the county’s economic health. Entry-level Vestas workers make between $16 and $28 per hour, depending on experience. Horizon said it plans to hire 20 full-time employees at Antelope Ridge.

“We’re talking family-income jobs here,” Kirkland said. “Resumes are pulled from local resources. We find a guy with hydraulic, electrical or crane experience and train him to work on turbines. Mill workers have great experience for these jobs. It’s nice to see something take the place of the timber industry as more mills close.”

Many nearby colleges, including community colleges in Walla Walla, Wash., The Dalles and Vancouver, Wash., have begun to offer training programs for wind turbine technicians, Hulse said. Horizon also hires road maintenance workers, custodians to clean the rugs at Elkhorn Valley’s headquarters and electricians to help with transmission line maintenance.

The hardest part of his job, Hulse said, is handling misinformation. Some residents complain that the turbines are loud and cause health problems. But the most vocal opponents have never seen the wind turbines up close, Hulse said.

By offering tours of Elkhorn Valley, and bringing schoolchildren and others to the site, he hopes that one day his work will be seen as positive rather than detrimental to the county.

“I work out here every day and I’m healthy,” Hulse said. “After a while, you don’t hear them anymore. When I have conversations with people, I can usually minimize the misinformation. We ask people to come out and listen to the turbines and get them involved so they see both sides of the equation.”

Energy is always a trade-off

Though wind farms are bringing in tax revenue and jobs, some residents, as well as federal and state agencies, are concerned about the effect that increased energy development will have on wildlife.

At his home in Union, resident Jed Farmer has become accustomed to seeing elk raise their young in the foothills. Soon, however, those foothills could be covered in turbines, driving elk into the valley floor’s farms, where they will most likely be shot by property owners, Farmer said. Farmer, a member of the Union County Planning Commission, regrets voting yes to Elkhorn Valley. He recently joined Wilkinson’s group Friends of the Grande Ronde Valley.

“I’m not against wind, but I’m against wind in this area,” Farmer said. “The local wildlife’s existence depends on coming down the foothills to breed. Maps I’ve received from the Oregon Department of Fish and Wildlife show the wildlife have already moved out of the areas with turbines at Elkhorn. Three golden eagles have been killed. The area we live in will change dramatically as more wind is added.”

Both the U.S. Fish and Wildlife Service and the Oregon Department of Fish and Wildlife also have concerns about how Antelope Ridge turbines would affect wildlife. Horizon is working with both agencies to see what can be done to mitigate any harmful effects to wildlife.

Of course, any industrial-scale energy development is going to change the land and the way wildlife live in it, Lewis said. He calls those protesting the wind farms for environmental reasons “romantic greens.” At this point, Lewis said, any alternative is preferable to more coal, and any alternative is going to impact something, whether it’s elk, people or a state’s landscape.

“Milk doesn’t come out of a carton and power doesn’t come out of the socket,” Lewis said. “When you don’t allow a project like this to (proceed), that’s that much more coal we’re going to use. Wind isn’t the solution, but it’s part of the solution.”

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Business Energy Tax Credit changes

Previously:
• Tax credit for wind and other renewable energy resource generation projects was 50 percent of eligible project costs filed over five years.
• Tax credit for renewable energy resource equipment manufacturing facilities was 50 percent of eligible facility costs claimed over five years.
• Pass-through option rate for all projects is 9.85 percent.

Now:
• Limits credits for wind projects greater than 10 megawatts to $3.5 million in 2010, $2.5 million in 2011, and $1.5 million in 2012. Renewable energy program pre-certification costs capped at $300 million for projects from 2009 to 2011 and capped at $150 million for projects from 2011 to 2012.
• Manufacturing tax credit extended to sunset on Jan. 1, 2014, and renewable energy and conservation tax credit extended until July 1, 2012.
• Pass-through rate for partners taking a five-year, 50 percent renewable energy tax credit is 7.16 percent for public, tribal or manufacturing projects, and 4.29 percent for all other projects.

When chief development officer Chris Taylor and his business partners decided to start their own wind energy development company last year, they looked across the country for wind friendly states before choosing to site their headquarters in Portland.

“We looked at all of the places vying for the title of renewable energy capital,” Taylor said. “The two big pieces that drew us to Oregon were the state’s renewable energy portfolio standard and the Business Energy Tax Credit.”

But with changes to reduce the amount of tax credits for large-scale wind energy projects set to pass the Senate later this week, wind companies like Element Power are concerned about getting their projects off the ground, as well as keeping Oregon competitive as a destination for wind development.

“This bill is better than the bill passed by the Legislature last session,” said John Audley, deputy director of the Renewable Northwest Project. “We urge the Senate to pass it un-amended. But the simple fact of the matter is these revisions will have a negative impact on wind in Oregon. And projects are not going to get built.”

In the past, developers of Oregon wind projects could earn tax credits for 50 percent of eligible project costs. That cash savings allowed Oregon wind developers to offer lower electricity prices to utilities, which made Oregon wind projects more attractive than those in other states, according to Elon Hasson, project manager at Horizon Wind Energy.

But if HB 3680 passes, the tax credit in 2010 would be reduced to $3.5 million for wind projects greater than 10 megawatts. The credit would decrease to $2.5 million in 2011, and $1.5 million in 2012.

Project managers such as Hasson are concerned that their projects, like Horizon’s Antelope Ridge Wind Power project in Union County, will be less desirable to buyers if they are offered at higher prices.

“BETC allowed for lower prices to utilities,” Hasson said. “Without that extra financing available, our ability to price our product at the best price will be adversely affected. We’ll be offering projects to buyers at a higher price.”

In the meantime, other states, such as Washington, are extending tax exemptions for wind projects. As a result, Hasson says, projects could be built elsewhere. Washington has a sales and use tax exemption that reimburses developers for sales tax paid on machinery and equipment used to create wind energy. Wind developers, until June 30, 2011, can exempt 100 percent of sales tax paid for wind project machinery and equipment. From July 1, 2011 through June 30, 2013 the exemption drops to 75 percent.

Though Oregon has an advantage because it doesn’t have a sales tax, its property taxes are much higher in the rural areas where wind projects often are located, according to Taylor.

“Property tax rates in rural counties in Washington tend to be lower,” Taylor said. “If you develop a wind farm in California, where there are higher power prices, you don’t have to pay to deliver it from Oregon. I worry that more projects will get built in another state rather than here.”

Jan Johnson, communications director for Iberdrola Renewables, said changes to BETC could potentially impact the company’s plans to construct new wind projects in Oregon. Though it has no plans to leave the state yet, Johnson said the company will have to see what the Legislature and the next governor decide to do when the BETC program comes up for renewal in 2012.

“The company is still working through its development plans for 2011 through 2012,” Johnson said. “We will have to weigh the smaller tax credit to determine if it makes Oregon investments less viable than opportunities in other states.”

Another concern for wind companies, according to Taylor, is the nearness of the sunset date for wind energy tax credits. Element Power has initiated several wind and solar projects since it opened its doors last year, but is not at a stage where it can start building.

“As a developer, we go out, find sites and negotiate with utilities to sell power,” Taylor said. “Building these projects takes a lot of lead time. Having a sunset further into the future is what will spur more projects. People have to believe there will be sufficient economics to support their projects as they get built.”

And as Oregon’s tax credits sunset, other states with superior wind activity and development incentives could easily surpass Oregon for wind development, according to Hasson. Oregon is sixth in the nation for wind energy it has developed, but Hasson doesn’t expect the state to climb the rankings in coming years.

“This won’t destroy wind energy in Oregon but we will drop from our leading role,” Hasson said. “The rest of the country is catching up to where Oregon was five years ago. There will have to be other things the state does to stay competitive without BETC.”

The Senate Finance and Revenue Committee will hold a work session on at 1 p.m. on Friday.

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