There will be a wind farm in Clark County. Oak Tree Energy has been negotiating with NorthWestern Energy, through the South Dakota Public Utilities Commission, and late last Tuesday the PUC handed down its decision.
Oak Tree Energy is owned by the Makens family: Bill and sons Michael, Pat and James. The family also owns Oak Tree Lodge, six miles northeast of Clark. This process of wind developing has been a 10-year process, the last four years dealing with the Public Utilities Commission consideration, in contractual dealings with NorthWestern Energy.
This is very preliminary in the planning and building stage for the Clark Wind Farm. Those decisions will be forthcoming, said Bill Makens, but it is a little premature at this point to be very detailed.
The Tuesday PUC hearing was long with many issues needing to be tackled and ironed-out, but the PUC voted in favor of the Clark Wind Farm.PUC decisions were made with split votes among the three commissioners, Gary Hanson, Kristie Fiegen and Chris Nelson.
Commissioners Hanson and Fiegen favored recommendations made by staff member Brian Rounds rather than new recommendations offered by commissioner Chris Nelson.
A key point of difference was whether NorthWestern customers should pay more up front and less in later years over the 20-year life of the deal. Nelson preferred a more-level basis.
“I think that’s wrong,” Nelson said. “I’m concerned with what electrical bills are today.”
Hanson responded that he didn’t want to force an injustice on Oak Tree by limiting the company’s ability to get financing for the project.
NorthWestern Energy could appeal the matter to state court, but there’s been no indication the utility will take that route.
“It was a lengthy docket because it was an important one and sets precedent to some extent,” Hanson said as the discussions concluded Tuesday.
The Oak Tree case was the first PURPA-based negotiation in many years for the PUC. Oak Tree Energy filed a Large Generator Agreement (LGIA)application with NorthWestern Energy on May 11, 2009. Oak Tree Energy attempted to negotiate with NorthWestern to buy the power. And, according to Bill Makens, NorthWestern refused to negotiate.
Oak Tree Energy petitioned the South Dakota Public Utility Commission under the Public Utility Regulatory Policies Act of 1978.
What is PURPA?
The PURPA law was passed by the United States House of Representatives on a voice vote July 18, 1977 and the United States Senate passed the bill on October 6, 1977 by an 86-7 vote. President Jimmy Carter singed the bill into law on November 9, 1978.
The Public Utility Regulatory Act was passed as part of the National Energy Act. It is meant to promote greater use of domestic renewable energy.
“The law forced regulated, natural monopoly electric utilities to buy power from more efficient producers if that cost was less than the utilities’ own “avoided cost” rate to the consumer; the avoided cost rate was the additional costs that the electrical utility would incur if it generated the required power itself or if available could purchase its demand requirements from another source,” Makens said.
He continued, “This free market approach presented investment opportunity and government encouragement for more development of environment-friendly renewable energy projects and technologies.”
This PURPA case has been in front of the South Dakota PUC since 2009. The decision a week ago gives the Clark Wind Farm the go-ahead.
Wind Farm Benefits
“Wind electric generation would generate substantial direct, indirect and induced economic benefits for South Dakota,” said the elder Makens in an interview.
These benefits Makens listed included:
– Direct benefits include jobs, land lease payments and increased tax revenues.
– Indirect and induced benefits result from local spending due to increased demand for goods and services.
– Economic benefit drivers include the use of local construction companies; the presence of in-state component supplies, local wage structures, local property tax structures and operation and maintenance expenditures.
According the Makens, the wind farm will light up 5,850 homes. It will provide an economic investment in the county of Clark and the state of South Dakota. It will create construction jobs and permanent jobs. It will create taxes for the county and state. It will provide rent to landowners with towers on their property.
“This is positive for South Dakota economy and for future job growth. This is home-grown energy coming from right here in South Dakota. It is renewable, it is clean and that is good for South Dakotans. Wind power has the potential to displace substantial amounts of natural gas consumption thus reducing upward pressure on natural gas and prices. Wind power saves water consumption,” he closed.
Bill Makens is the chief executive officer and the registered agent is Michael Makens.