January 18, 2007 issue

Public Hearing for Creston Wind Turbine Project January 25

The North Carolina Utilities Commission has scheduled a public hearing for Thursday, January 25, at 7:00 p.m. to hear comments on a proposed 25- to 28-wind turbine project in the Creston community of Ashe County. The public hearing will be held in the small courtroom at the Ashe County Courthouse in Jefferson.

Project Background

In August 2005, former Ashe County Commissioner Richard K. Calhoun and Tommy E. Calhoun formed a limited liability company called Northwest Wind Developers, LLC, and in October 2006 filed an application with the North Carolina Utilities Commission for approval to construct a wind-generating facility. According to the application, the facility would consist of 25 to 28 windmills, each generating two megawatts with a combined planned project total of 50 megawatts and an annual power production of 150 million kWh.

The proposed site for the installation is the Creston community in Ashe County on land bordering Rich Hill Road, Willie Walker Road, Roaring Fork Road, Big Springs Road and East Big Springs Road.

The project is anticipated to come online in fall 2008 and has a 20- to 25-year anticipated service lifetime.

Financial Matters

According to the application, the estimated cost of the facility is $60 to $65 million. However, a statement of forecasted cash flows developed in February 2006 by Costello Hill & Company, certified public accountants in Greensboro, estimated the total cost at approximately $72 million, with the windmills costing $1.3 million each and infrastructure improvements to allow the power to be transferred to the utility grid estimated at $7.25 million.

According to the statement of forecasted cash flows, the venture will begin making money in year 2 after posting a loss of $690,225 in year 1. Income from the sale of electricity is estimated at $1.575 million in year 1, steadily increasing to $10.275 million in year 10 and $13.809 million in year 20. Annual cash flow estimates increase from $697 in year 2 to $269,355 in year 10 and $361,990 in year 20.

Northwest Wind Developers anticipates selling the power to Blue Ridge Electric Membership Corporation.

The Ridge Law Question

Because the windmills are proposed for installation on mountain ridges in Creston, in November 17, 2006 Utilities Commission staff petitioned for a declaratory ruling as to whether the Mountain Ridge Protection Act of 1983 prohibits the construction of the project, pointing out that further review of the application and a public hearing would serve no purpose if the application could not be lawfully granted.

No response to that petition is posted in the public documents related to the case; however, on November 22, the Utilities Commission overrode the staff petition, stating, “After careful consideration of the application, the Commission finds good cause to schedule the application for hearing, establish a procedural schedule, and require Northwest [Wind Developers, LLC] to publish notice as required by G.S. 62-82(a).”

Further, in a letter of support for the project, Dr. Dennis Scanlin, professor in ASU’s Department of Technology wrote: “I have spoken to Margaret Hayden who introduced the bill in 1983 and to David Diamond who chaired the subcommittee that developed the bill and others involved in the issue at the time and all have indicated that the exemption was specifically put there to exempt electricity producing windmills and the MOD-1, 2MW utility scale windmill on Howard’s Knob, Watauga County, in particular. This was the world’s largest electricity producing windmill at the time and was often discussed in the news throughout the state. The Watauga County Attorney, the Director of Planning & Inspections, the Watauga County Planning Board and the Watauga County Commissioners have all just examined this issue while considering the adoption of a county ordinance addressing wind energy development and have unanimously agreed that the exemption for windmills in the Mountain Ridge Protection Act includes electricity producing windmills and have adopted an ordinance which provides a permitting process for windmills on mountain ridges. I do not see how any objective examination of this issue can come to a different conclusion and I hope the current ambiguity which exists in regards to this issue can be corrected.”

Scanlin’s references to Watauga County pertain to the commissioners’ approval of a permitting process for wind power-generating installations in August 2006.

In a letter to Utilities Commission dated January 8, 2007, Richard Calhoun also addressed the Ridge Law issue: “We feel that the Mountain Ridge Protection Act of 1983 does not apply to this project. I had the pleasure of being a student when the Howard’s Knob project was running and I have followed the technology since that time. The 1983 Act specifically excluded windmills, because of the Howard’s Knob project. The writers of the 1983 Act had the foresight to envision technological advances that make this a viable project.”

Pro and Con

Two letters in support of the project are posted with the public documents: Scanlin’s letter and one from Priscilla Cox who cites the decreased views from pollution-caused haze and the potential for farmers to hold on to their land as her reasons for supporting the project.

Two letters opposing the project are also posted, one from Creston resident Scott Pope who expressed concern about the project’s s proximity to his residence and its “detrimental, potentially devastating effect” on his “health, well-being and the quality of his remaining life.” The other opposition letter is from Johnny Burleson of Raleigh who raised four concerns: the impact on the Creston community cannot be determined from the application, the project could violate the Ridge Law, property condemnation may be necessary to create a utility corridor, and as the first of its type in North Carolina, the project “raises many environmental, economic and aesthetic concerns. Without proper in-depth studies on impacts to such things as avian resources, value to adjacent properties and to the overall tourism based economy of Ashe County, this certificate should not be granted.”

Applicant’s Statement

In his January 7 letter to the Utilities Commission, Calhoun wrote: “We would maintain that this area of Ashe County is ideally suited for the project in question. We are the landowners and are acutely aware of the heritage and beauty of the area. Having grown up here, with an extensive heritage, we want to maintain our working farms. This is not a hobby or game to us. We respect what the land is allowing us to create. Our goal is always to use best management practices. This will be the same principle we will use if granted a permit for the wind project. Our local farms are under much development pressure. This endeavor would promote maintenance of the farms and open green spaces by making the farm more financially viable.

“Northwest Wind Developers has the up [sic] most concern for the aesthetics of the project. We live here and work the land as our forefathers did (with modern tools, of course). The land is seen as a treasure to be protected and passed to future generations. If this project is allowed to go forth, our beloved mountain will not be raped. Every step and shove [sic] of dirt moved will be planned with care. I don’t think this has to be a destructive process.

More Info and Comments

Click to www.ncuc.net and search for Docket No. SP-167 to read the application and supporting documentation.

Anyone who wishes to comment on the application can file a written statement with the Utilities Commission that references Docket No. SP-167, Sub 1 and is addressed to Chief Clerk, North Carolina Utilities Commission, 4325 Mail Service Center, Raleigh, NC 27699-4325.

Statements will be included in the commission's official files; however, a written statement may not be received as evidence unless the person filing it appears at the hearing next Thursday and testifies.