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Oregon Lime Wind Project

Oregon Lime Wind Project. David Van’t Hof Lane Powell PC Harvesting Clean Energy Boise, Idaho October 25, 2011. Lime Wind. Lime Wind (Not for the Faint of Heart). Lime Wind (A Giant Leap of Faith). Lime Wind (A Long and Winding Road). Lime Wind. A Project of Firsts

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Oregon Lime Wind Project

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  1. Oregon Lime Wind Project David Van’t Hof Lane Powell PC Harvesting Clean EnergyBoise, Idaho October 25, 2011

  2. Lime Wind

  3. Lime Wind(Not for the Faint of Heart)

  4. Lime Wind(A Giant Leap of Faith)

  5. Lime Wind (A Long and Winding Road)

  6. Lime Wind • A Project of Firsts • First Oregon Wind Project Sited on Bureau of Land Management (BLM) Land • First Oregon Wind Project in Baker County • First Oregon Wind Project between 1 and 9 MW • First Oregon Wind Project to use Repowered Turbines • First Oregon Wind Project to Seek New Market Tax Credit

  7. Lime Wind • Basic Information • $7.2 million, 3 megawatt (MW) wind farm • six rebuilt Nordtank 500kW wind turbines from Europe • Expected to produce approximately 7,800 megawatt hours (MWh) of electricity annually, to be sold to Idaho Power Company through the Oregon mandatory Public Utility Regulatory Policy Act (PURPA) Energy Sales Agreement • Located on BLM land • Turbines are erected and commissioning should be completed in November

  8. Lime Wind • Some Key Numbers • Construction loan - $4.55 million • Community loans from Eastern Oregon and Business Oregon - $450k • Contractor Deferred Payments - $1.135 million • Professional Services - $350k • USDA REAP Grant - $500k • USDA Loan Guaranty - $2.3 million • Section 1603 Grant - $1.89 million projected • SELP loan - $2.5 million • BETC – $2.115 million tax credit ($1.417 million cash) projected • BEF – xxx REC payments

  9. Lime Wind • More Numbers • Turbines - $2,793,720 • Foundation - $540,300 • Electrical - $604,500 • Erection - $360,834 • Engineering - $24,000 • Road Work - $80,000 • Interconnection - $643,444

  10. Lime Wind • Key Partners • Public and Non Profit • BLM (ROW and Environmental Review) • USDA (REAP Grant and Loan Guaranty) • ODOE (BETC and SELP) • Baker County and Business Oregon • Bonneville Environmental Foundation (RECs)

  11. Lime Wind • Key Partners • Private Sector • Randy Joseph; Joseph Milworks Inc., Lime Wind LLC • Seminole Financial Services (Construction Loan) • Kirby Nagelhout, Bend, OR (General Contractor) • Barnhart Crain, Portland OR (Turbine Erection) • Wind Nielsen, Germany (Turbines) • MotorFabrik, Denmark (Turbine Reconditioning) • Danish Wind Turbine Services, Denmark (Turbine Rebuilding and Maintenance) • Fontier Pro, Banning, CA (Operation and Maintenance) • Idaho Power, Boise, ID (Utility)

  12. Lime Wind • Other Key Considerations • What Does Construction Financing Entity Want? • Management Team • Sole Purpose LLC • Security on turbine components while in Europe • Clear path out with identified revenue streams (e.g. needed take out lender to land construction lender) • Warranty (issue since repowered turbines)

  13. Lime Wind(Many Twists and Turns)

  14. Lime Wind(Many Twists and Turns) • Turbines • Planned purchase of 12 - 250kw Mitsubishi turbines from a project in California fell through • Switched to 6 – 500kw Nordtank turbines from Europe • European components created asset security issues to be worked out with Seminole • Larger size caused issues with BLM approval which restricted turbines to 200 feet (FAA lighting concerns)

  15. Lime Wind(Many Twists and Turns) • SELP • ODOE initially committed to a construction loan, recognizing unique aspects of project for financing • ODOE later recanted and only issued extension of commitment for Take Out Financing • ODOE later threatened to pull the plug entirely on a final extension of the loan commitment which would have killed the project

  16. Lime Wind(Many Twists and Turns) • BETC • Preliminary Certificate issued March 6, 2009 • Eligible Costs locked in at time of Pre-Cert despite project cost increases over next two years • ODOE decided that amendment to Pre-Cert could not increase project costs • With creation of federal Section 1603 Grant, ODOE decided that the federal grant amount was to be deducted from eligible costs in the preliminary certificate • Legislation in 2011 fixed the problem and directed ODOE to deduct the federal grant from the actual project costs when completed • Need to amend the Pre-Cert; still in process

  17. Lime Wind(Many Twists and Turns) • New Market Tax Credit • More equity desired due to higher project costs and less BETC return • Project in right census tract • One potential allocatee insisted on acquiring 49% of project (NO) • Wind projects difficult to meet NMTC demands re jobs and community economic development

  18. Questions • Is Lime Wind Replicable • Is Community Scale Wind in Oregon possible with reduction in incentive packages? • Government projects? • Coop projects?

  19. Seattle Portland Olympia Anchorage Tacoma London www.lanepowell.com

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