Comfrey Wind Energy wins two extra years for project development

Comfrey Wind Energy LLC has gotten some extra time to finish development of its 31.5-MW project in Brown and Cottonwood counties, Minn.

The Minnesota Public Utilities Commission in a May 9 order agreed to extend the construction start and acquisition of a power sales agreement deadlines by two years.

In January 2008, the commission issued a site permit to Comfrey. The site permit required Comfrey to either obtain a power purchase agreement—or other legally enforceable mechanism for selling the project’s electricity—within three years of the date the permit was issued or advise the commission of the reason for failing to do so. The permit imposed the same requirement for beginning construction of the wind farm.

In January 2011, Comfrey Wind filed a petition to amend the site permit to extend by two years the deadlines for obtaining a power purchase agreement and beginning construction. The company stated that delays in the power grid interconnection process had prevented it from executing a power purchase agreement or beginning construction. In March 2011, the commission granted Comfrey’s petition, amending the permit to allow the company two more years to obtain a power purchase agreement and begin construction of the wind farm.

On Jan. 15 of this year, Comfrey filed a second petition for a two-year extension of the power purchase agreement and construction deadlines, citing protracted interconnection delays and uncertainty over whether Congress would renew the production tax credit in 2013.

Project got caught up in a dispute over power line costs

“The Commission finds good cause to extend the deadlines in Comfrey’s permit based on protracted delays in the power grid interconnection process that caused the project to fall behind schedule,” said the May 12 order. “In August 2007, Comfrey was in final negotiations for a long-term power purchase agreement with Xcel Energy. However, that fall, the Midwest Independent Transmission System Operator (MISO) announced that it planned to allocate the entire cost of a planned transmission line connecting Brookings County, South Dakota, and Hampton, Minnesota, (the Brookings Line) among just 19 generation projects, including Comfrey. Comfrey’s total interconnection cost would have been $26.6 million, with a large part of that figure attributable to the Brookings Line. One of the generators challenged MISO’s allocation of the Brookings Line costs, bringing the dispute to the Federal Energy Regulatory Commission. MISO ultimately decided to spread the cost of the Brookings Line across its entire system.”

The commission added: “In the meantime, however, Comfrey abandoned the agreement with Xcel because it could not meet the utility’s timeline. Furthermore, without knowing its interconnection costs, Comfrey was unable to attract investors or submit accurate bids on requests for proposals for wind generation.”

Comfrey learned its final interconnection costs only in May 2012. However, by that time, financing opportunities were drying up as the expiration of the federal production tax credit, in December 2012, approached. In January of this year, Congress extended the credit for another year.

“With the extension of the production tax credit, the project appears well positioned to contribute to Minnesota’s renewable energy goals,” the commission noted. “Comfrey has obtained leases and easements from the landowners in the project’s footprint and has wind option agreements with adjacent landowners. An updated NHIS search disclosed no rare species within a mile of the project area. Finally, the project enjoys strong local support. It is owned by 11 local investors, qualifying it as a community-based energy development (C-BED) project under Minnesota Statutes section 216B.1612.”

At the commission meeting in this case, the parties agreed that Comfrey’s permit should be updated to modern standards using the permits recently issued to Pleasant Valley Wind LLC and Paynesville Wind LLC as models.

“For all these reasons, there is good cause to amend the Comfrey permit to conform to the Pleasant Valley and Paynesville permits, with the following two additions,” the commission said. “First, the Commission will include a special condition requiring Comfrey to take precautions to avoid and minimize impacts to Blanding’s turtles, a species which the [state Department of Natural Resources] identified as living near the project area. And second, the Commission will include a special condition requiring Comfrey to send an explanatory letter to landowners in the project area summarizing the changes to the amended permit.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.