Green Mountain Power meets deadline for $40 million wind tax credits, must pay $10 million to ISO-New England

Editor’s note: This story by Robin Smith was first published in The Caledonian-Record, the state’s third largest daily newspaper.

LOWELL — The 21st and final turbine of the Lowell wind project was “commissioned” Tuesday evening when it was brought online to produce electricity for the grid.

That means Montreal-based Gaz Metro’s subsidiary Green Mountain Power will receive a federal production tax credit for wind energy worth more than $40 million.

“It’s an important thing that we met the deadline,” GMP spokesman Robert Dostis said on Wednesday.

The tax credit for wind energy is slated to expire Dec. 31, and GMP has been working hard to get the turbines operational before the end of the year.

The 21 turbines will continue to be tested over the next two weeks, Dostis said. That means that some will be operating while others will be offline for inspections.

All of the wind towers will be generating electricity for the grid before the end of the year, he said.

The commissioning of the Kingdom Community Wind project on the Lowell ridgeline ends a monumental year for the Orleans-Essex counties area.

Turbine parts began to roll through the region by truck and rail in July to the Lowell wind site and protesters climbed the mountain and blocked the main road in Lowell. GMP has won all of the appeals of the project so far; the remaining appeals are over stormwater runoff permits.

Also this week, state utility regulators approved a federal requirement that GMP pay up to $10 million to the area electricity grid operator, ISO-New England, for the installation of a dynamic reactive device in order to connect to the grid.

The device is the least expensive alternative, according to the Vermont Public Service Board, and therefore is allowed as part of the Lowell wind project’s certificate of public good. The three members of the quasi-judicial board issued the ruling on Monday. Dostis said the payment to ISO-New England won’t impact the cost of electricity generated by the wind project.

Dostis said that GMP will pay less than $10 million to ISO-New England, under an agreement the state’s largest utility has worked out with the grid operator.

Power from the Lowell wind project will cost between 9 cents and 10 cents per kilowatt hour, Dostis said.

The Kingdom Community Wind project in Lowell is in Vermont Electric Cooperative territory. Co-op members voted to support the project. GMP will sell some of the electricity generated by the wind project to VEC at cost.

Once the wind project generates electricity and the amount and value is known, then GMP will begin to know what it will pay annually in taxes to the host town of Lowell.

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16 Comments on "Green Mountain Power meets deadline for $40 million wind tax credits, must pay $10 million to ISO-New England"

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Craig Kneeland
3 years 8 months ago

Reactive devices were already installed as part of recent Vermont Electric Cooperative Substation upgrades. Since reactive devices are most efficiently located near the source of reactive current, ratepayers should not be buying another $10M worth of capacitors for loction elsewhere. We should have the money spent locally to automate the capacitors. If the recently installed capacitors were not adequately specified by VELCO, and the wind turbine output needs more reactive adjusting, VELCO should be the entity responsible for correcting the problem. Our PSB should not be agreeing to have Vermont ratepayers paying twice!

3 years 8 months ago
Craig, It is more complicated. Shumlin, the PSB and GMP all hang together. Whatever the extra costs for wind energy, GMP just rolls them into rate schedules, per PSB approval. ISO-NE goes by the principle of “the disturber pays”, as did the VT-DPS under David O’Brian, the previous head. Here is a little write up regarding IWTs on ridge lines in Maine not being as economically-viable as touted. Industrial wind turbine facility developers usually use estimated capacity factors, CFs, of 0.32 – 0.38 for IWTs on 2000-ft high ridge lines to obtain financing from banks and investors, and approval from… Read more »
craig david
3 years 8 months ago

Drove by the Lowell site the other day and the turbines are an awesome sight! Glad to see Shumlin following through on renewables…that’s why I voted for him.

Lance Hagen
3 years 8 months ago

Craig,

Maybe you should contact Shumlin’s office. I am sure he would gladly place one of these turbines in your backyard. In that way, you wouldn’t have to drive at all, plus save gasoline, to gather in its awesome beauty!

craig david
3 years 8 months ago

Lance, I see them on my way to Jay Peak, and I suggest we keep them on top of the ridgelines where the wind is.

3 years 8 months ago
Robin Smith, Thank you for writing this article. As you know, ice and snow build up on rotors of IWTs yields less energy production, and causes excessive noise, and numerous complaints from nearby residents. The German solution, well-known to Vestas, et al, is to heat the rotor blades with warm air. It is described below and in these URLs. http://theenergycollective.com/willem-post/53258/examples-wind-power-learn http://theenergycollective.com/willem-post/84293/wind-turbine-noise-and-air-pressure-pulses Snow/ice build up on turbine blades during windy conditions cause roaring sounds that drew complaints about the Lowell wind turbines on Nov. 3 and 4. The noise, which at least 21 neighbors described as unbearable, began early in the… Read more »
Brian Buckley
3 years 8 months ago

It blows my mind that some people respond with comments to every one of these stories. Its like they don’t have jobs to keep them busy… Or their job is running a propaganda campaign and they simply omit the fact someone is paying them to write their one-sided, fact-picking posts.

Willem Post
3 years 8 months ago

Some people are retired, have knowledge and experience, are not being paid by any entity, want the best for Vermont; wind turbines on ridge lines are poor choice in Vermont.

A better place would be the Great Plains

Ed Duggan
3 years 8 months ago
Willim: Do you really think that First Wind would still be investing tens of millions of dollars installing projects in Maine if they were not making a profit for them? I have worked in the wind energy industry for over 30 years and know that the economics work well on most projects in the US. And those projects would still be competitive with other technologies if government subsidies were removed from ALL types of energy and environmental costs were properly assessed. What are your alternatives? More subsidized and potentially dangerous nuclear? More generation from natural gas obtained through fracking? Or,… Read more »
Lance Hagen
3 years 8 months ago

Ed, your statement of “projects would still be competitive with other technologies if government subsidies were removed from ALL types of energy and environmental costs were properly assessed” is questionable.

According to 2010 data (latest year published) from Dept of Energy on subsidies, Wind received $52M/billion kwh of power generated. Compare that to Coal at $0.64M/billion kwh, Natural Gas at $0.63M/billion kwh and Nuclear at $3.1M/ billion kwh.

For your statement to be true, your environmental costs factor must be enormous to offset the difference in subsidies

John Greenberg
3 years 8 months ago

You need to look at 50+ years of direct AND indirect government subsidies, not just one. You also need to look at the multiple tax code subsidies, and indirect subsidies like the Price-Anderson insurance plan for the nuclear industry, most of which I suspect are not included in the DOE data you’re citing.

One example. The government did ALL of the research and development for what became the civilian nuclear industry in the 1940s and 1950s. Without that, the nuclear industry wouldn’t exist at all. Your oversimplified analysis would completely overlook that fact.

Lance Hagen
3 years 8 months ago

No, Mr Greenberg …… my analysis is pertinent, since Mr. Duggen is claiming that Wind would be competitive TODAY with removal of all subsides. He is not talking about the cum over the last 50+ years.

So from the data I showed, removing subsides TODAY is not going to make Wind competitive!

Ed Duggan
3 years 8 months ago
Mr. Hagen: There are several early projects utilizing “1st generation turbines” (under 200kW, utilizing 3-bladed, upwind design) located in California that are still running and profitable after nearly 30 years. Yes, they benefited from some rate support and tax incentives at their startup but they have continued to run reliably and competitively year after year for at least 20 years beyond those tax incentives and over 15 years beyond any rate support. If they were such bad performers, wouldn’t they all be replaced by now? As far as competitiveness of new Wind Projects without tax subsidies goes, let’s be clear… Read more »
Willem Post
3 years 8 months ago

First Wind invests because on the spreadsheets it shows wind energy Is profitable.
This is only because about 50% of the 25year levelized costs are offset by various subsidies and write offs
The VT-DPS has the spreadsheets, but they are not made available for
“proprietory reasons”

MJ Farmer
3 years 8 months ago
The Bolton Wind Turbine has been operating since 2009. It was supposed to produce 300,000kWh/yr. As of today (Dec2012) it has produced approx 500,000kWh total. http://www.boltonvalley.com/about-us/environmental-initiatives/wind-turbine If we are really passionate about Global Warming, we would be building a new nuclear power plant at Vermont Yankee’s site, where the infrastructure and workers are already in place. The new nuclear plant would be capable of recycling up to 95% OF THE EXISTING WASTE. Plus produce power at a fraction of the cost of the renewables. Then with low cost, clean power, we can have our electric vehicles and afford to expand… Read more »
john burton
3 years 8 months ago

thrivemovement.com

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