ENFIELD — Construction on the Black Oak Wind Farm, a seven-turbine project about 10 miles west of Ithaca in the town of Enfield, is expected to begin this fall, nearly 10 years after the project was first envisioned. Black Oak Wind Farm is a for-profit company owned by 150 investors, about half of whom […]
ENFIELD — Construction on the Black Oak Wind Farm, a seven-turbine project about 10 miles west of Ithaca in the town of Enfield, is expected to begin this fall, nearly 10 years after the project was first envisioned.
Black Oak Wind Farm is a for-profit company owned by 150 investors, about half of whom are accredited, according to project manager Marguerite Wells. She is also the VP on its board of directors, and one of the project’s investors.
All but six of the investors are New York state residents — those six are family and close friends of other investors, according to Wells. About 100 of the investors live in Tompkins County.
“This is the first example I know of [in New York] where people came together and said, ‘we actually want a wind farm and we’re going to build it ourselves,’ ” rather than having an outside developer making a pitch to a town, Wells says.
She is awaiting approval for building permits she applied for on Sept. 4. The first construction will focus on the installation of the wind farm’s substation, Wells says, where it will interconnect with the existing power grid owned by utility company New York State Electric & Gas Corporation (or NYSEG).
Installation of the seven turbines should begin in the summer of 2016, and the wind farm is expected to be operational later in the year.
The total cost of the farm — which will be situated on about 1,000 acres of land off Black Oak Road in Enfield — should be between $40 million and $45 million, and will be financed through a combination of private equity, tax equity, and bank debt, says Wells.
She has raised $3 million in investment capital over the past four years, and is working to finalize a financing package in the coming weeks that will provide the rest of the capital. She declines to disclose terms, or identify the bank.
Four land owners are leasing the acreage to the wind farm, she adds.
General Electric (NYSE: GE) designs and sells the turbine model to be constructed at the site. It has a 2.3-megawatt capacity, giving the farm a maximum capacity of 16.1 megawatts, according to the Black Oak website. Each turbine will stand 483 feet tall where the tip of a blade reaches its highest point, and the base of the turbine is about 15 feet in diameter.
GE will handle the operation and maintenance of the turbines once they are assembled. Those services come with the purchase of the turbines, according to Wells.
She anticipates the wind farm will have a 32 percent net capacity factor, which is the farm’s average rate of output at any given time over an entire year, factoring in periods when there is less wind. That output would provide enough electricity to power about 5,000 local households, according to Wells.
The company has a power-purchasing agreement in place with Cornell University. Wells declines to disclose the price, but says it “escalates at a fixed percentage year-to-year.”
Black Oak Wind Farm is working on the short list of bids for the construction contract, Wells says. About $500,000 has been spent on the environmental impact statement, most of which went to New York–based firms.
Project history
The seeds for Black Oak Wind Farm were first planted about 10 years ago when Wells’ neighbor, John Rancich, put up a small wind turbine on his property that underperformed. He began exploring the idea of building a commercial-grade turbine nearby, according to Wells.
Rancich found a good location about a mile from his house — the site where Black Oak Wind Farm will be built — with plenty of wind, open space, and a transmission line going across it.
“Those are sort of the bare bones of what you need to get started,” says Wells, who joined the project eight years ago when she approached Rancich, asking how she could help.
Her role quickly escalated to that of project manager, and for four years she devoted time to the farm’s development while Rancich financed it through the company he had started, called Enfield Energy.
Neither person had any prior experience in wind energy, other than the unsuccessful small turbine with which Rancich had experimented. “It was just a question of learning it and figuring it out and doing it,” Wells says.
In 2011, Wells bought out Rancich when he no longer had the assets to fund the project, and founded Black Oak Wind Farm. However, Rancich remains an investor in the project, Wells says.
“It was going to die if I didn’t come up with a new plan,” Wells says. “We had tried shopping it around to big wind developers, and nobody wanted a seven-turbine project. It’s just too small for most of the developers to be interested in.”
Near the beginning of the project’s introduction, the town was asked if it would like to own the farm, and it declined due to the financial risk and complexity involved, Wells notes.
Finding its footing
In her pursuit of a viable option to keep the wind farm alive, Wells says she discovered a seven-turbine farm in South Dakota that is owned by about 600 South Dakota residents.
“It was a neat community-ownership model, and they got it done,” she says. Wells reached out to South Dakota–based firm Val-Add Service Corporation, which had assisted in the development of that wind farm, and hired it as a consultant on her own.
“They gave me a road map on how to raise community money, because I had no idea how any of that worked,” she says.
Wells proceeded to raise $2 million in development capital, which she says was used to move forward several elements of the project, such as attaining the power purchasing agreement with Cornell University, the environmental work for the environmental-impact assessment, the interconnection process needed to tie into the electric grid, attaining a contract with GE for the turbines, as well as a contract with the New York State Energy Research and Development Authority (or NYSERDA) for renewable energy credits.
Wells raised another $1 million in 2014 in construction capital to begin paying for critical infrastructure that needed to be ordered, like an electrical transformer.
All $3 million she has raised came from community investors.
None of the project cost will be covered through financial incentives from any level of government, says Wells. “The incentives come when you generate [power].”
Black Oak Wind Farm has forged a payment in lieu of taxes (PILOT) agreement with the Tompkins County Industrial Development Agency (TCIDA) for the land on which the farm will be built. Wells says the flat-rate, 15-year PILOT requires the wind farm pay $8,300 per year for every megawatt installed, which equals about $130,000 annually.
From plants to power
Wells used to co-own a wholesale plant nursery called Mother Plants with her wife that specialized in green roofs. “We supplied almost every green roof in Syracuse, and about half of them in Rochester,” as well as projects in New York City, Boston, and Philadelphia, Wells says.
She originally expected to return to the nursery business after the wind farm was completed, but Wells says she is having too much fun, and she doesn’t want to go back and let die the eight years she has invested in education for the wind farm. “I want more projects,” she says.
In spring 2015, the couple sold Mother Plants to a Canada–based company, and the business now operates from Ontario under the same name.
“We still have a small amount of nursery left, but the majority of our business is downsized because we just didn’t have time, frankly,” Wells says.
The remaining nursery is now called Two Mothers Farm, Inc., and offers soil for green roofs, interior living walls, and consulting services for horticultural projects, according to its website.