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Tuesday, July 07, 2015

Ind. Decisions - SD Ind. decides Benton County wind turbine contract dispute; more on wind turbines

This 68-page opinion dated July 6th, from SD Indiana Judge Barker, is in the case of Benton Co. Wind Farm v. Duke Energy. The sumary of the parties' dispute begins on p. 29:

The dispute between the parties in this litigation boils down to a determination of their existing contractual relationship in view of significant changes in the manner of wind energy production and distribution that have occurred following the execution of their long-term agreement. When the parties entered into the PPA (and commenced performing their obligations thereunder), BCWF was the sole wind farm in the Benton County (Indiana) area. As previously noted, after BCWF began generating energy for Duke’s purchase, several additional wind farms entered the market area, which ultimately caused electrical transmission lines to be congested and gave rise to the need for manual generation curtailments. For a period of time, because the Wind Farm was a “must run” facility, Duke suffered a negative fiscal impact of the oversupply of energy based on the negative LMPs. However, after wind energy was re-classified as DIR, the negative impact of the additional wind energy generation shifted to BCWF who was faced with curtailment orders from MISO, requiring it to decrease its output by approximately 41%.

Two intertwining legal issues have arisen under the PPA as a result: First, does the PPA’s requirement that Duke “reasonably cooperate” with BCWF when bidding power require Duke to perform its obligations in such a way that its bids result in BCWF’s maximum production of electricity? Second, when Duke makes bids to MISO that result in the curtailment of BCWF’s production, is Duke indirectly violating the PPA’s prohibition against Duke’s curtailment of BCWF’s output? The answers to these questions turn on whether the PPA is properly construed as an output contract or a take-or-pay contract, the latter requiring Duke to purchase all the power BCWF was (is) capable of producing.

BCWF seeks by this litigation to compel Duke to purchase all the power BCWF is able to generate, thereby forcing Duke to make aggressive bids to MISO in order to maximize BCWF’s output and the benefits of its bargain under the PPA. * * *

For the foregoing reasons, we DENY BCWF’s Motion for Summary Judgment and GRANT Duke’s Motion for Summary Judgment. Final judgment shall enter accordingly.

Much wind-energy is being generated in Benton County, as reported in this Feb. 4, 2015 Lafayette Journal & Courier story by Chris Morisse Vizza, headed "Amazon harnesses Benton County winds." Some quotes:
The unstoppable winds that howl across Benton County's crop land will move Amazon Web Services toward its long-term goal of using 100 percent renewable energy. * * *

Amazon Web Services in November announced its commitment to achieve complete renewable energy usage for its global infrastructure footprint.

Amazon Web Services and Pattern Energy Group Inc. last month announced a 13-year deal in which Amazon agreed to purchase energy generated by more than 60 wind turbines that Pattern will build and operate near Fowler.

Pattern Energy will erect the turbines in phase four of Fowler Ridge Wind Farm, which was sold to Pattern Energy by BP Wind Energy, BP press officer Jason Ryan said. BP continues to operate the first three phases, he said.

By early next year, the new turbines will generate about 500,000 megawatt hours of wind energy annually, enough to power 46,000 homes in the United States, Pattern Energy spokesman Matt Dallas said.

Near the end of the long story:
The county has seen a lasting impact from the previous building boom.

Managers stayed to operate the wind farms. Overall, 95 jobs have been added since 2009, Kepner said.

And more than 1,000 visitors have taken the guided wind farm tour she created after the first round of contractors left.

The take-away is that Benton County's sparse population of 8,700 — typically a drawback for economic development — can be turned into a positive.

"We have a lot of farm ground for these wind farms to be dispersed on and don't have the population nearby," she said.

"When you have a niche, you make that work for you."

Here is a long June 26th story by Frank Denzler in the Rushville Republican headed "Rush County wind farm issue up in the air." It begins:

For a number of years, rural and city residents have silently been choosing sides on should energy producing wind turbines become a part of the county’s landscape. However, in recent months, as the possible reality of wind turbines nears, the silence has been broken, with those for and against the issue willing to discuss their side of the matter.

Currently, county leaders are weighing the situation, gathering information and listening to those on both sides of the issue regarding the placement of 600-foot towers on rural property. Earlier this week, a number of county officials made a trip to Benton County and spoke with that county’s leaders and residents to gain still another aspect of what has become a controversial topic locally.

The Rushville Republican also had a June 30th story headed "Tax analysis from proposed Rush County wind farms."Yesterday, July 6th, Dave Schultz of the Bluffton News-Banner reported: "Wind turbines out in Wells County after zoning rules revision." Some quotes:
The Area Plan Commission is recommending that no large wind energy conversion systems, better known as wind turbines, be placed in Wells County.

The ban does not affect the locations that have already been approved for Apex Wind Energy, sites that have been the subject of recent litigation and face an uncertain future with county officials. It does mean that, after the county’s zoning and subdivision control ordinances have been amended, there will be no zoning classification that will allow large WECS to be sited anywhere in Wells County. * * *

[O]ne member of the Wells County Board of Commissioners, Tamara Dunmoyer, said she and her fellow commissioners — Blake Gerber and Kevin Woodward — wanted wind turbines written out of the county’s zoning ordinance.

Dunmoyer, who is a party to a lawsuit that has been working its way through the Indiana appellate system, emphasized her point by walking over to a chalkboard that had three options concerning wind turbines. She wrote KW, TD, and BG, the initials of the three commissioners, and circled Option 1 — the elimination of large WECS.

The nine APC members present Thursday night then voted unanimously to recommend that option as part of a massive revision of the ordinances. There are 70 revisions in total, but three of them — wind ordinances, concentrated feeding operations, and allowing the use of truck bodies for storage — drew the most comment as the APC considered the changes.

In the end, however, the rules on CFOs — in particular, the distance the operations can be located from wells — and the proposed rule changes on the use of truck bodies for storage remained what had been recommended to the APC by an ordinance redraft committee. A CFO or manure lagoon must be at least 500 feet from any well other than that which services the CFO or manure lagoon, and truck bodies as storage units are allowed only in agriculture and industrial zoning, forbidden in residential zoning, and may be used in some other zoning classifications by request.

Wind turbines, however, got the ax. Dunmoyer had asked for that during the APC’s June meeting, citing the controversy they had brought to the county.

The prohibition, however, applies only to large WECS. Small- and medium-sized WECS may still be approved.

Posted by Marcia Oddi on July 7, 2015 09:23 AM
Posted to Environment | Ind Fed D.Ct. Decisions | Indiana Government