Archive for September 9, 2015
Everyone Knows It’s Windy
by John Weckerle
In a September 4, 2015 article, The Independent’s Leota Harriman reports on a Moriarty City Council meeting at which the Estancia Valley Economic Development Association (EVEDA) provided a semi-annual report on economic development activities.
The article is replete with opportunities for our admittedly nerdy penchant for looking things up and analyzing them – so many so that they simply cannot be covered in a single article, so we suppose we’ll have to call this one the second of a series, with the first being Saturday’s article. At a minimum, we envision examining the following issues:
- The Iberdola El Cabo project and wind energy impacts on county economies (today’s article)
- The concept of amenities as a means of “attracting millenials” and, as a result, technology/manufacturing businesses
- The Local Economic Development Act, including what it says (and perhaps more importantly what it doesn’t say), and the status of the Certified Communities Initiative and other State economic development programs.
And that’s probably just a start; economic development is a complex subject.
For today, we focus on the first item in the list above. This comes in two parts; statements on the El Cabo wind energy project contained within the article, and some interesting studies involving economic impacts on county and state economies as a result of impacts.
El Cabo, or Not El Cabo
From The Independent article, reporting on a presentation by Myra Pancrazio, Executive Director of EVEDA discussing the potential for Torrance County obtaining a hospital using Payment in Lieu of Taxes (PILT):
Those PILT funds will expand greatly with the Iberdrola wind farm project, which is still “alive and kicking very hard,” she said. Iberdrola recently entered a 25-year contract agreement with Tri-State Generation and Transmission for purchase of wind-generated electricity.
According to that press release, the wind farm is expected to be completed in 2017, when it will produce 76 megawatts of energy, all of which will be purchased by Tri-State.
The idea that the Iberdrola project was moving forward (acknowledging that having a power purchase agreement [PPA]) is no guarantee that a project will be completed) was certainly new information; as reported in an August 28, 2014 Albuquerque Journal article, construction on the project had stopped and there has been little heard about it since. This would be great news for at least some part of the local human population – although potentially less so for local birds and bats – hoping for the economic benefits arising from wind projects. We enthusiastically scoured the web, including the sites of both Iberdrola and Tri-State, both of which post their press releases, and were disappointed to find no indication of a press release announcing a PPA for the Iberdroga El Cabo project in Southern Torrance County. The text in The Independent’s article appears to refer to a press release involving Iberdrola’s Twin Buttes project in southeastern Colorado (previously reported by the Mountain View Telegraph).
While the press release is at least a little good news for the good folks of Bent County, Colorado and renewable energy advocates within Tri-State’s region of influence (and perhaps the aforementioned Torrance County birds and bats), we fail to understand how this development would affect PILT funds, or any other aspect of economic development, in the Estancia Valley. And we also have to wonder how news that Iberdrola is focusing successfully on a project elsewhere, while the local project is halted, is cause for optimism here.
Of course, if we’re wrong about this, we’d invite anyone with information to that effect to click the comment icon (the little word bubble at the top right of the article) and let us know. We’ll be glad to acknowledge the error.
Hang Your Hat on the Wind
At the outset of this discussion, we refer our readers to two sources: Economic Development Impact of 1,000 MW of Wind Energy in Texas published by the National Renewable Energy Technology Laboratory (NREL), and this summary of Ex post analysis of economic impacts from wind power development in U.S. counties. As the latter article states: “…total county personal income increased by $11,150 over the 2000 to 2008 period… And, for every megawatt of wind energy installed in a county, one half of a job was created.” Of particular interest are Tables 3 and 4 of the NREL report, which show that the “local” share of the project tends to represent a relatively small percentage of the total project cost. According to the State Land Office, of the 80,000 acres envisioned for the project, 39,000 would be State land. In terms of acreage essentially half is owned by the state- so it is unclear just how much revenue would be collected by local landowners in terms of leases for tower locations, and how that would relate to local economic benefits in terms of increased economic activity and tax revenue for Torrance County. Unfortunately, as the NREL article notes, the inputs into the JEDI model, which projects economic impacts of wind projects, are often proprietary, so we can’t easily apply it here. While we agree that the project would be of benefit to economic development at the county and state level (assuming that it restarts), we caution that the benefits of wind energy projects may not be what is sometimes envisioned.
We’d like to let our readers know that we will probably be taking a few days off to attend to other things, but should be back next week.