| 10/18/2013 | Omaha Public Power District To Buy 400 MW From Grande Prairie Wind Farm |
The Omaha Public Power District (OPPD) board has approved a long-term power purchase agreement to buy up to 400 MW of wind-generated electricity from the Grande Prairie Wind Farm.
The project, to be developed by Minnesota-based Geronimo Energy LLC, will be located northeast of O'Neill, Neb. The agreement has a term of 20 years and represents OPPD's largest wind power purchase to date.
According to an OPPD spokesperson, the deal underscores the company’s commitment to adding renewables to its generation portfolio.
“In fact, it is a part of our mission statement that OPPD will provide affordable, reliable and environmentally sensitive energy services to our customers,” the spokesperson says. “At the same time, OPPD is also committed to a diversified fuel mix as a means to provide the lowest rates possible to our ratepayers now and in the future. Wind generation is obviously a big part of our effort to accomplish those things. Finally, a large portion of our customer base has said this is something that they want to see us pursue, [and] as a result, this is something we will continue to pursue.”
The proposal will increase OPPD's renewable energy generation capacity to 817 MW, nearly doubling current amounts, and increasing to 30% the amount of retail generation that comes from renewable energy sources.
OPPD says during discussions, the board heard that prices for wind energy are the lowest the district has seen and that acting now would allow the developer to take advantage of the federal production tax credits. However, OPPD says the agreement is contingent on the extension of those tax credits and on the project winning approval from the Nebraska Power Review Board. The new wind farm is expected to be operational in the second half of 2015.
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| 3/28/2013 | Midwest Wind Energy Exits Project Development, Sells Off Portfolio |
Illinois-based Midwest Wind Energy (MWE) will no longer actively develop wind farms and has sold the majority of its project development portfolio to Minnesota-based Geronimo Energy.
Michael J. Donahue, executive vice president of MWE, tells NAW that the company began searching for an alternative source of funds about 18 months ago, after losing capital from long-time joint-development partner Edison Mission Energy.
“The hardest capital to come by today in the industry is the risk money that comes with developing projects from scratch,” he says. “We had partnered with Edison seven-and-a-half years ago to provide us with a development loan structure that funded all of our development activity. That aspect of the relationship changed when Edison had to curtail the development funding on its entire wind portfolio - not just Midwest Wind Energy - as a result of an internal financial situation.”
Donahue says his company’s relationship with Edison “continues to be excellent,” but MWE was left with two choices: find another joint-development partner to help fund and complete MWE’s portfolio, or sell the portfolio.
After exploring several options, the company set its sights on Geronimo Energy in fall 2012, and on March 26, 2013, the two parties announced that Geronimo would acquire substantially all of MWE’s portfolio.
“At the end of the day, Geronimo demonstrated a strong source of development funding and expertise,” Donahue explains. “Our primary objective was to keep our portfolio viable and moving forward.”
The acquisition Through the deal, Geronimo purchased eight wind development projects representing a total potential capacity of over 1 GW. The portfolio includes the 400 MW Grand Prairie wind farm in Nebraska and the 210 MW Walnut Ridge wind farm in Illinois. Financial terms of the acquisition were not disclosed.
Blake Nixon, president of Geronimo Energy, says it was a strategic acquisition to help broaden the company’s portfolio and enter new markets, especially in Illinois.
“Illinois is a large market, not only from the utility side, but also from the commercial-customer perspective,” Nixon says. “There are a lot of great corporate headquarters in Illinois, Chicago in particular. We see a lot of attractiveness to the Illinois market.”
In addition, Nixon considers several of the portfolio’s projects construction-ready. “We think that the projects are very well developed,” he says. “Midwest Wind Energy selected good sites that are competitive and can offer real viable options for buyers.”
Geronimo has also hired “a substantial number” of employees from MWE. Nixon says having members from MWE’s development team on hand was necessary to continue with the portfolio’s progress and create a seamless transition.
“This was almost like a merger,” Donahue adds. “One of our top priorities was that if we were going to transfer the assets, we wanted to transfer the key staff along with the assets - that was one of our major objectives in finding a suitable purchaser.”
What’s next? MWE has retained the 75 MW Broken Bow II project in Nebraska because of a current power purchase agreement, as well as a few minor assets that Donahue says will likely wind down over the next several months. However, now that MWE has sold most of its portfolio, the company will remain as an entity but not actively develop wind projects.
Donahue says that he and partner Stefan Dell, president of MWE, still have some contractual rights to the projects purchased by Geronimo, as well as to other projects that the company has worked on over the years.
“We’re basically going to be maintaining our contractual relationships and deriving income,” he explains. “We will not be actively out prospecting for new sites. We will not be developing a new portfolio. We want to basically support the portfolio we transferred to Geronimo. If those projects are successful, Midwest Wind Energy will derive an economic benefit.”
Geronimo, meanwhile, will move ahead with its newly purchased projects. “We have already begun the transition and are continuing to develop the projects as is appropriate,” Nixon says. “We’re marketing the projects to customers for power sales, as we are the rest of our portfolio.”
He says Geronimo will continue to seek new opportunities for the company to grow.
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