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Illinois: Wind power: Schools look to wind farm to help budget

Joint venture could generate revenue to ease financial woes

Source:  Copyright 2010, Chicago Tribune
Date:  April 6, 2010
Original URL: Status DEAD


With state budget cuts forcing them to lay off dozens of teachers, three school districts in Chicago's suburbs are moving forward on a unique joint venture that could help secure their long-term financial future: a wind farm in central Illinois.

With help from Milwaukee-based Heston Wind, Keeneyville School District 20, Carpentersville School District 300 and Prospect Heights School District 23 are looking to build and operate a 10-turbine, 20-megawatt wind farm in Stark County, about 150 miles southwest of Chicago.

If successful, the project could be a template for other cash-strapped school districts that lack land to construct turbines on their campuses.

"This is the first of its kind in existence that we know of," said David Ulm, supervisor of facilities and energy management for Community Unit School District 300. "We anticipate this being a model for not only school districts in Illinois but other school districts throughout the country."

The schools are able to undertake the project under a 2007 law that allows Illinois school districts, community college and municipalities to own and operate wind farms to reduce energy or operating costs.

Schools harnessing wind energy is not new. A few school districts in central Illinois already rely on turbines to meet their energy needs. Bureau Valley High School was the first in 2005, erecting a 220-foot turbine on its campus in Manlius.

But the financial structure of the so-called "School Wind Consortium" is unique. The three school districts are not going to use the electricity themselves, but rather use revenue from selling power generated by the wind farm to defray their electricity costs.

Earlier this month, the school districts inched closer to their goal after receiving approval from officials in Stark County to erect a 197-foot meteorological tower that records wind data.

The schools chose Stark County because it already had an ordinance allowing wind farms, said Gary Ofisher, director of operations for District 20, which has been stymied by Hanover Park trustees in its efforts to build a wind turbine at Greenbrook Elementary School.

The three school districts hope to have the wind farm operating by 2011, when it is expected to generate about $3 million in revenue each year, an amount about equal to District 300's electric bill last year, Ulm said.

Just how much revenue the schools can reap from the wind farm has been a contentious issue in Springfield. Last year, state Rep. Fred Crespo. D-Hoffman Estates, introduced legislation that would have amended a law that says utilities can buy power from the schools at a fraction of market cost.

Although 50 school districts supported the measure to grant schools one-to-one credit for each kilowatt produced by a wind turbine, utilities opposed the bill. They argued the legislation would have resulted in schools receiving distribution and transmission at no cost, forcing the utility to pass those costs on to customers.

"We felt that type of cost shifting is not fair to customers outside the participating school districts," ComEd spokesman Peter Pedraza said. The bill also violated federal regulations, said Kevin Borgia, executive director of the Illinois Wind Energy Association.

So the schools crafted a new financial strategy. They now plan to raise half of the estimated $45 million cost of the project by issuing "Build America Bonds," which were part of stimulus legislation passed last year. The bonds call for the federal government to subsidize 35 percent of interest payments.

The other half of the project's costs will be raised by finding a private investor, who would stand to reap generous tax credits that could double the investment, Ulm said.

While much of the initial revenue will be used to pay off bonds, the school districts estimate they will generate $60 million in revenue by selling electricity back to grid over the 30-year life of the project.

Such a payout can't come soon enough for the school districts.

District 300 is facing $15 million in cuts this year and has laid off 153 teachers. District 20 faces a $1.6 million shortfall this year and has laid off 30 teachers. District 23 faces about $1.3 million in cuts and plans to lay off the equivalent of about 10 employees.

But the school districts remain optimistic about the potential revenue from the wind farm in years to come.

"It would absolutely be helpful to the bottom line," said District 23 superintendent Greg Guarrine.

Wind generation is already funding schools in Illinois, even without their direct involvement. Every megawatt of privately owned turbines built in the state brings $9,000 to $13,000 in new property tax revenue each year, with about 60 to 70 percent going to local school districts, Borgia said.

"This new revenue also comes without new students or other strains on local infrastructure, making wind farms an incredible revenue source for schools," he said.

Borgia said students at school districts that install wind turbines will be the biggest beneficiaries.

"Not only are turbines an excellent tool for teaching about clean energy, but wind helps schools greatly reduce their electric bills, which is often one of their largest fixed costs," he said. "This means money can be diverted for more important uses, resulting in better education for Illinois' students."

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