(Photo by Dennis Schwartz)

(Photo by Dennis Schwartz)

Wind Currency

An energy project awaits the green light in Solano

Back Article Oct 31, 2010 By Matt Perry

The proposed Shiloh III project, a 120-megawatt expansion that still requires approval by the Solano County Planning Commission this month, would place 59 new wind turbines next to the company’s existing Shiloh II project. Shiloh II, a 150-megawatt operation completed in 2008 in Montezuma Hills, provides electricity to 74,000 households.

The six- to nine-month construction phase of Shiloh III would provide $85.4 million in revenues to Solano businesses, governments and households, according to a study by Regional Economics Consulting, which was commissioned by San Diego-based enXco. That projection includes $27.4 million in wages created by 487 jobs. The study highlights other benefits for the county during construction, including $43 million in value-added payments, nearly $650,000 in sales taxes, and more than $500,000 in property taxes.

Solano, rich in carbon-based resources like oil and natural gas, has for decades been home to energy-related businesses, such as the Valero Benicia Refinery.

“If one were to place this particular wind generation facility somewhere else, the local economy probably would not benefit as much,” says Robert Fountain, the study’s author. “Solano County already has a significant infrastructure that supports major energy projects spanning oil production and natural gas.”

After construction, the 20-year operational phase would provide employment for an estimated 36 workers who would be paid $2.46 million annually, according to the study. Annual sales taxes and property taxes are estimated at approximately $650,000 and $530,000, respectively.

The developer would spend $300 million to install 59 turbines — each generating 2.05 megawatts — made by REpower Germany, including some components made in the U.S. EnXco would recoup its costs through tax credits and a power purchase agreement with Pacific Gas & Electric Co. PG&E currently holds the agreement for the Shiloh II wind turbines and is now seeking approval from the California Public Utilities Commission for the expansion. 

Mark Tholke, director for enXco’s southwest region, says he expects all approvals to be completed in early 2011.

Power generated from the turbines is dumped into the California Independent System Operator, which operates the state’s high-voltage wholesale power grid.

The Montezuma Hills turbines sit on private farmland. Landowners negotiate annual royalties from enXco in the low five-figures for each turbine. Besides diversifying the Solano economy, county officials say these royalties help retain the county’s agriculture base by supplementing the income of family farmers.

Fountain says the jobs and revenue outlined in the report apply directly to Solano. But, he adds, “the methodology does not identify how many [jobs] are actually enXco employees.”

EnXco would not disclose how much it paid Fountain for the study.

Shiloh III is one of three wind turbine expansions planned for Solano. The other two are a 37-megawatt turbine project by NextEra Energy Resources and one by the Sacramento Municipal Utility District totaling 128 megawatts. Both have existing turbine projects in Solano.

Solano County supervisor Michael Reagan says enXco was the first energy company to provide such a study to the county. “This is a new approach that enXco has put together,” he says. The Shiloh expansion is another step toward the county’s goals of economic revitalization and energy diversification, he adds.

Combining existing and planned wind turbines nearby would mean topping 1 gigawatt of energy for Solano, Reagan says, which he compared to the output of a nuclear power plant.

“Dr. Fountain was quite surprised to find that we had companies that could compete for over 80 percent of the work,” Reagan says. The long history of energy development within the county, he adds, seamlessly supports renewable energy construction with legal, engineering, construction, and other essential services.

Today, Solano is a coveted region for renewable energy production because of its proximity to both the Bay Area’s 7 million residents and greater Sacramento’s 1.5 million citizens.

“The location of Solano with the (existing) grid structure and being close to market … makes us an area that should continue to be successful in growing renewables,” says Mike Ammann, president of the Solano Economic Development Corp.

EnXco’s Tholke says the breezy Montezuma Hills on the southern edge of Solano are one of four major wind resource areas in California; the other three are the Bay Area’s Altamont Pass Wind Farm, the San Gorgonio Pass Wind Park near Palm Springs and the Tehachapi Wind Farm in Kern County. Only Tehachapi and Montezuma Hills can be readily expanded, he adds, since Palm Springs is considered fully developed and Altamont pass has had controversial bird deaths.

Not everyone, however, is excited about the economic spell of the proposed Shiloh III project. 

Officials in tiny Rio Vista — a town of 8,000 founded on natural gas development and closest to Montezuma Hills — asked enXco to use local resources as often as possible during construction.

“I was disappointed that we would be impacted only slightly,” says Hector De La Rosa, city manager for Rio Vista. He says the city would receive no property taxes from the project and only minimal contracting work. 

Although there are no preferred purchasing agreements with local businesses, Reagan says enXco is acting in good faith to honor such concerns. “They are very, very much trying to be a good corporate client,” he says.

Tholke agrees, saying enXco is eyeing a Shiloh IV wind development on Montezuma Hills, along with future solar projects within the county.

Besides wind and solar, Reagan says, the county wants to expand support for cogeneration plants, biomass and other alternative energies.

“From an economic development standpoint this is what you want to do. You’re meeting lots of goals,” Ammann says. “We’re going to be one of the largest suppliers of renewables in Northern California.”

If approved by the county and state agencies, Shiloh III construction would start in April 2011 or after the rainy season.

Reagan says the only likely opposition on the county level is from a Rio Vista senior living community. If an appeal is filed, the project is then escalated to the Solano County Board of Supervisors for further review.

The county’s Airport Land Use Commission must also approve the project.

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