New wind energy plan pursued by Ames City Council
August 25, 2009
The Ames City Council voted unanimously Tuesday to notify the organization IAMWind that it will withdraw membership from the project that is working to provide wind energy to the city — a project that has thus far cost taxpayers more than $256,000.
Council member Matthew Goodman said the city’s involvement with IAMWind stems from its goal of going green and receiving at least 10 percent of its energy through renewable resources by 2015. However, Goodman said complications with the relationship have convinced them to, for now, abandon the collaboration.
“IAMWind is an organization to bring different municipalities together who want wind energy,” Goodman said. “It is essentially a way for us to say, ‘Hey, if a project gets developed somewhere, we want to help out, and in return, get megawatts from the wind power.’ However, because we have bumped into some issues with them, we need to look at other options.”
However, Donald Kom, director of electrical services for the city of Ames, said the city has not ruled out working with the organization in the future. For now, he said, the city is pursuing a potential power purchasing agreement with NextEra, a company that is developing a wind farm in Story County.
“We saw working with IAMWind as a very good option to add renewable energy to our portfolio, but we also wanted to look at other options,” Kom said. “We received 10 other options, one of which was from NextEra, who said they could get us wind power by January of 2010. We also did the economic analysis and compared that with IAMWind, and saw that they did not yet have a steady price set, and NextEra did.”
The city, however, has already spent a total of $57,000 on phase one of the IAMWind project and is expecting to soon be required to pay an additional $197,000 for phase two.
Council member Jami Larson expressed concern regarding the cost, and asked Assistant City Manager Sheila Lundt if the city would work with IAMWind to possibly receive a partial refund from the cost of phase two, as they are in the middle of the phase currently.
“We have incurred substantial cost from phase one and phase two,” Larson said. “Are there any of those costs that we believe are justifiable for us to have returned to us or is this just lost money?”
Lundt responded, saying, “There will probably be some debate about what that second payment should be from us for phase two. I do believe the investment from us in phases one and two at this point is gone. According to the way the 28E is structured, we can’t anticipate, probably, recovery of anything we have spent so far.”
Larson went on to further express his hope for a partial refund. said paying the total cost of both phases would be an undue burden on the taxpayer for a contract that was not completed.
“I think we are being kind in telling the public that maybe our switching providers for wind is a reason for getting out of the agreement, but I have to express my disappointment with IAMWind and the relationship we have had with this group,” Larson said. “I hate to give away $250,000 of taxpayer money. I would hope we could get some of that back because I don’t think they have honored their agreement the way this council voted to have it presented”
Goodman also expressed his grievances with the organization, as well as the entire situation, saying Ames has a great track record of producing its own energy. He said he had hoped they could do the same with wind power thorough IAMWind, instead of purchasing from NextEra, which is a private company.
“Relinquishing control of our utilities worries me in the sense that the more control we have, the more we can choose to benefit the community rather than profit. I don’t have a problem with profit — I’m a business owner and I actually like it quite a bit — but with regards to community resources, it is nice to have people that are held accountable to people in the community,” Goodman said.
“I like that our municipal effort to produce our own energy in this community has been cost effective, I think it shows that the government can do good things and is not always just a burden, and I was hoping that this IAMWind project would be another piece of that, but it appears logistics and relationships have killed that opportunity. I will support this motion, but I would just like to express that there was an opportunity to do great things and it didn’t occur.”
Although the potential power purchasing agreement with NextEra will not be voted on until Sept. 8, many members of the council, as well as Lundt and Kom, did express their optimism regarding the project.
Through NextEra, the wind power will be available for purchase in January of 2010, much sooner than was expected from the IAMWind project. Additionally, the city will purchase 36 megawatts from the company, Kom said, a much more manageable amount than was anticipated with IAMWind.
While Kom did note that purchasing wind power is a big step toward going green, he said that the power purchasing agreement, whether though IAMWind or NextEra, will place a greater cost on those paying for power.
“Yes, the cost on the customer will go up slightly by us purchasing wind power,” Kom said. “We are in discussion right and I would prefer not to say how much right now, I do not want to speculate.”
In addition to providing wind energy to the city of Ames, the possible agreement with NextEra will also get Iowa State one step close to fulfilling its own desire to go green. Of the 36 megawatts purchased from NextEra, only 30 will go the city, with Iowa State purchasing the rest.
Jeff Witt, assistant director of utilities at Iowa State, said in a press release that purchasing wind power from NextEra’s facilities is an important step toward making the university a model of energy efficiency.
“While Iowa State’s power plant is a very efficient coal-burning plant, our power generation is still based on a nonrenewable resource,” Witt said. “We are very committed to greater sustainability at Iowa State and are looking forward to using wind power to help meet our energy needs.”