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  • Minnesota Renewable Energy Objective (REO) projects.  When we were writing this pro= posal, we were considering having an equity partner in the project who could = take advantage of the federal production tax credits (PTC) and accelerated depreciation on the turbines.  However, we still felt that we should receive a fair price for = the electricity and thus proposed selling the electricity to SMMPA at a pr= ice equal to the consumption price charged by the City of St. Peter.  Perhaps our price was too hig= h (it was slightly higher than CBED guidelines) or there was a misunderstand= ing about the pricing scheme (SMMPA might have assumed that we would simpl= y be consuming the electricity).  In any event, we were not on the short list for further discussion.

 

  •   We felt that we should explore Deere and Company as a potential equity investor and possibly as a sou= rce of turbines.  Although th= ey did have contracts for some wind turbines, none were for models that would suit the wind climate in St. Peter (we would suffer a serious reductio= n in capacity factor).  In add= ition, it became clear to the members of the committee that Deere and Company would be making substantial profits on many aspects of the project, including turbine sales and interest from financing, as well as the PT= Cs and depreciation.  Althou= gh we felt that we learned a great deal in the discussion, we chose not to pursue a partnership further.

 

  • turbine would perform better than a Suzlon S-88 and they guarantee 95% availability in the first 5 years of operation, so we are seriously considering using their turbines for our project.

 

  •   In the even= t that we fail to identify one or more equity investors who could take advant= age of the tax credits and depreciation, we are considering a model where Gustavus would use as much of the generated electricity as possible and sell the excess to SMMPA or another entity. We are also discussing the= interconnection process with the City of St. Peter and whether there would be any additional tariffs placed on us in the event that we choose this model.  We have transmitt= ed our wind turbine production and consumption data to SMMPA and expect to receive word from them in the near future concerning pricing for our excess electricity.  We s= hould then have all of the information needed to consider the two different financial models and various combinations.