Residents of Spanish Fork, Utah, a city of 32,000 located about 50 miles south of Salt Lake City, had often complained about their windswept hair and leaf-littered swimming pools. The predictable winds are the result of diurnal mountain gusts that blow back and forth at dawn and dusk through the canyon situated just above the city. These reliable winds sparked plans to develop Utah’s first commercial wind farm near an urban community.
Coal mined from central and southern Utah to fuel colocated power plants provides Utah residents with some of the nation’s lowest electricity rates.1,2 Because most people in Utah live in the northern Wasatch Front mountain areas, however, electricity generation from these coal-fired power plants has been largely out-of-sight and out-of-mind. A bill requiring Utah utilities to generate a small percentage of their electricity from wind and other renewable sources received little public support and failed in the Utah legislature in 2003.3 Climate change was not on the state’s political radar at the time, and the prevailing view at the legislature and among Utah’s utilities was that there was no need to change Utah’s reliance on coal.
Not everyone agreed, however. Weather inversions trapped emissions from cars, industry, and agricultural livestock in northern Utah’s valleys, and pollution from coal-fired power plants obscured the scenic vistas of southern Utah’s famous national parks.4,5 With increasing talk at the national level about carbon taxes or cap-and-trade emission restrictions that would add significantly to the cost of fossil fuels, some renewable-energy advocates recognized that tapping Utah’s wind for electricity could be part of the solution to meet rising energy needs.2
Transmission is widely recognized as one of the primary barriers facing wind energy development in the United States.6 Most of the nation’s best wind resources are located in the Great Plains stretching from west Texas to the Canadian border, far from major load centers on the East and West Coasts. Transmitting electricity over long distances can result in power line energy losses of up to ten percent of generation.7 Utah, however, is in a unique geographical position. Some Utah energy stakeholders and policymakers describe the state as the “hole in the donut.” Utah is surrounded by more windy states, such as Wyoming, Colorado, and Idaho, while Utah’s geography provides only modest concentrated pockets of wind, such as near the mouths of canyons. Utah’s advantage, however, is that its urban population resides along the scenic northern Wasatch Front mountain range, so these reliable canyon winds blow near power users. Consequently, tapping canyon winds using small-scale turbine projects for the use of nearby communities would not require extensive new transmission lines.
Small-scale urban wind power generation is common in Europe. In Holland and Denmark, for example, wind turbines are everywhere, tucked around factories, roadways, and harbors. The United States, however, faces a challenging paradox. On the one hand, public opinion polls show strong citizen support for wind power as an alternative to fossil fuels; on the other hand, when specific wind projects are proposed, they often meet intense local opposition.8 The widely publicized opposition to the proposed Cape Wind Project off the coast of Massachusetts is an example of this trend.9 The solutions discovered at Spanish Fork, Utah, however, provide some insights into how to ameliorate resistance to local wind energy development.
The following case analysis describes the four-year struggle to establish Utah’s first wind project, one of the most urban in the nation, at the mouth of Spanish Fork Canyon.
In the early 1990s, Dean Davis cofounded Windward Engineering to test small residential wind turbines, setting up shop near the mouth of Spanish Fork Canyon. By 2003, Davis had amassed significant longitudinal data about the average speed, timing, and characteristics of nearby winds, determining that the location could be one of the best wind resources in the state. Ironically, Spanish Fork’s winds, well known to locals, were not included on a resource map issued by the US Department of Energy’s National Renewable Energy Laboratory, based in Golden, Colorado, and used by wind prospectors.10 Could Spanish Fork Canyon offer an uncharted viable wind resource?
When Davis shared his findings with Tracy Livingston, founder of the Utah start-up company Wasatch Wind, Livingston also recognized Spanish Fork’s potential. First, an old abandoned gravel pit at the mouth of the canyon could easily accommodate a small field of wind turbines. Second, Davis’s data showed that the diurnal wind was a consistent, powerful, and predictable resource, making it potentially attractive to utilities that would need to balance the variable wind resource with other power sources to meet load demand. Third, a nearby substation meant electricity generated from Spanish Fork’s wind would not require additional costly transmission lines.
Livingston backed the project, believing that a skyline of wind turbines producing clean power for local businesses, retailers, and homes could become a model for the nation’s energy future. Small-scale urban wind generation could keep energy dollars circulating within the community, creating jobs during the construction and operational life of the project. It could also generate lease payments to local landowners and increased property tax revenues for the city and county. Because the majority of property taxes generated by wind projects (and paid by developers) would be designated for county schools, Spanish Fork’s children would be key beneficiaries (in Utah, about 75 percent of county property tax revenues are designated for the local public school district).11 Livingston hoped the project would be fast-tracked.
Winning Public Consent
By April 2005, Livingston was ready to move forward with the project. The initial design was to incorporate seven 1.5-megawatt turbines at a cost of $13 million. It was estimated that the power generated from the project would meet about 74 percent of Spanish Fork’s 6,600 residential customers’ electricity needs (the city would still need to rely on fossil fuel sources to make up the difference and to supply power when the winds were not blowing). Commissioned studies by a reputable environmental consulting firm indicated that the turbines’ estimated noise level was expected to be 50 decibels, equivalent to traffic sounds on nearby highway US 6 between 1:00 a.m. and 4:00 a.m. Additionally, the consultant’s study of bird flyways and habitat suggested that the slow movement of the wind turbine blades and the height of the towers would not pose significant threats to birds or other wildlife.
The first obstacle came when a city engineer objected to the use of the gravel pit site because he feared the construction might interfere with the city’s nearby springwater collection system. The turbines had to be relocated to a site closer to homes and where the winds were not as strong, but Livingston saw this as a minor compromise. His next challenge was to win local consent. He began by informing the media, placing announcements in the local newspaper, and delivering about 3,000 flyers to residents living within one mile of the proposed wind project, announcing a town hall meeting to introduce Wasatch Wind’s plans. About 60 people attended the April meeting.
“This first project for Utah will create an awareness that is needed for other projects to get off the ground in this state,” Livingston told the town hall audience, “and I think that is the biggest, most important part of the project.”12 He explained the local economic and environmental benefits that could result from the wind project and discussed how displacing coal-fired electricity with wind energy would prevent several categories of pollutants from being emitted annually, including 59,000 pounds of sulfur dioxide and 77 million pounds of carbon dioxide.12
When Livingston showed virtual images of the proposed wind project on the landscape, however, residents voiced divided opinions. Each of the seven turbines would stand 213 feet tall with a wingspan of 252 feet. One resident remarked that a windmill was “the ugliest and most ungodly thing you’ve ever seen.”12 But another citizen said, “With windmills I can see the mountains. With haze from coal plants, I can’t see the mountains.”12
In June 2005 Livingston presented the wind project to the Spanish Fork City Council to secure the zoning change needed to allow construction of the wind project. After considerable discussion, the council voted unanimously to add wind turbines to Spanish Fork’s industrial zoning ordinance based on the economic benefits the wind project could bring to the community. The 1.5-hour meeting was telecast on the local Spanish Fork cable channel.
Hopes for fast-tracking the wind project were dashed, however, once Livingston began trying to sell his wind power. Rocky Mountain Power, the local utility monopoly, was Livingston’s only potential buyer. Because there was little consumer demand or political pressure for Utah to diversify into renewable energy locally, Rocky Mountain Power was not a motivated buyer. The utility balked at the wind project’s small size and Livingston’s asking price (Rocky Mountain Power was offering him just under five cents a kilowatt hour, but Livingston needed about six cents to make the project economically viable). Livingston turned to Utah’s Public Service Commission for help.
Under the Public Utility Regulatory Policies Act (PURPA) of 1978, utilities are obligated to buy electricity from eligible renewable-energy producers at the price of the utility’s “avoided cost,” or what it would have cost the utility to produce that power itself with its existing energy-generation infrastructure.13 Public service commissions are authorized to oversee PURPA’s implementation in their respective states, and Utah’s regulators had determined avoided cost based on existing depreciated coal-fired power plants because, at the time, over 90 percent of Utah’s electricity came from coal. Rocky Mountain Power’s offer was derived from the regulated formula; if wind developers could not meet Rocky Mountain Power’s avoided cost, the utility could refuse purchase.
At the commission hearings, Livingston and others testifying on his behalf argued that basing the prices utilities paid for renewable energy on the costs of depreciated coal-fired plants doesn’t square with prevailing market prices for new energy. Even new coal-fired power plants could not be developed at the avoided cost set for renewable energy by the commission (but then, coal and other fossil fuel plants were not subject to PURPA’s rules). In short, Utah’s method for calculating avoided cost virtually choked out any future for renewable energy in the state.
Rocky Mountain Power is owned by a regional utility conglomerate called PacifiCorp that operates in six states and is thus subject to six separate regulatory regimes. Ironically, Rocky Mountain Power had already negotiated higher avoided cost power purchase agreements for wind power in those other states, but the company was lowballing its offer for Livingston’s wind energy project in Utah. “This is an uphill battle,” Livingston told a reporter, “because the Public Service Commission … does not have a mandate for least-risk policies, only for short-term least-cost policies, which means that they are planning for today, but not for the future.”14
Not in My Backyard!
Outside the contentious commission hearings, public opinion was wavering. Unexpectedly, in January 2006, the Spanish Fork cable channel rebroadcast the June 2005 city council meeting approving the wind project, and it startled some residents.
Soon, concerned locals were calling for a moratorium on the wind project to determine how the turbines might affect nearby home values, noise levels, safety factors, and maintenance considerations. Based on the city council’s zoning, some of the turbines could be sited within 500 feet of residents’ homes. Living in the shadow of giant wind turbines was not something residents had bargained for when they bought their homes in Spanish Fork.
Wasatch Wind’s investment partner for the project, John Deere, the farming equipment company, had already reserved five turbines at a cost of $2.1 million each. Additionally, Livingston had invested $300,000 of his own money, primarily from mortgaging his house and drawing on his credit cards. If Spanish Fork enacted a moratorium, Livingston knew it could mean personal bankruptcy. The Spanish Fork City Council also faced a dilemma. It had already approved the project, but disgruntled residents threatened to sue the city.
The next city council meeting was the first for the newly elected mayor, Joe Thomas. Fired-up residents, some in support of and some opposed to the project, attended the meeting. In an unprecedented move, Thomas took a straw poll of citizens at the meeting, asking if they would support moving the project to a new location; most said they would consider it. He then pulled out some city maps and appointed a three-member board of principal opponents of the project to represent Spanish Fork residents in deliberations with Wasatch Wind about a new location.
By the next city council meeting, Thomas had brokered a compromise. Wasatch Wind agreed to erect nine 2.1-megawatt wind turbines, slightly larger than the original proposal, but to move them away from homes and back to the gravel pit site. The winds were stronger there, justifying the expanded project. The issue of the nearby water springs, however, persisted. After wrestling with his city engineer about the project’s proximity to the city’s water supply, Thomas turned to an independent consulting engineer, who determined that the project would not harm the city’s water-collection system. Moving the project, nevertheless, meant repeating numerous steps over several months, including signing new lease deals and drawing up a different site plan.
The delay led to another half million dollars in expenses, but Livingston reasoned, “We want this wind farm to be a flagship model for everyone of how to build a wind farm in Utah.”15 Even Spanish Fork city resident Aaron Fisher, who initially opposed the project, noted, “Everyone is fairly pleased with the compromises that have been made.”15
Wasatch Wind was ready to sign a 20-year power purchase agreement with Rocky Mountain Power. After months of wrangling over avoided cost regulations, the commission approved the use of a “market price proxy” that set the most recently executed wind contract for the determination of avoided costs for wind qualifying facilities in Utah. The latest power purchase agreement that Rocky Mountain Power had negotiated for a previously developed Idaho wind project, which was more than what the utility was offering Livingston for the Spanish Fork project, would become the market price proxy for Spanish Fork. Consequently, the utility agreed to pay five to six cents on the average per kilowatt-hour of electricity purchased from the project—just enough for Livingston to make the project work. Once completed, the project was expected to produce 60,000 megawatt-hours of power annually, enough to power approximately 5,700 homes.16
But another storm was brewing.
So Long, John Deere
Back at the state capitol, legislators were considering a simplified “flat” state income tax. Due to confusion about how the flat tax would affect revenues, tax credits for renewable energy that had been in place since 1981 were not renewed by the Utah State Senate in March 2006. Livingston needed the tax credits to make the project viable. For Wasatch Wind’s investment partner, John Deere, it was the last straw. Already uneasy about the delays, John Deere backed out of the project in June, taking its wind turbines designated for Spanish Fork to another more “wind friendly” state.
With a signed power purchase agreement in hand and the clock ticking on when Wasatch Wind had to deliver power, Livingston needed new turbines, a new investor, and a restoration of tax incentives—and fast!
At Livingston’s request, Mayor Thomas and the Spanish Fork City Council passed a resolution to redesignate the wind project as a “community redevelopment area,” which allowed Wasatch Wind to receive a 70 percent reduction in property taxes for ten years to help ease the project’s operational expenses and offset the loss of the tax credits. Without the wind farm, the gravel pit generated only $4,600 per year for the local school district. With the wind farm on the gravel pit, however, the district’s revenue share would increase to over $80,000 annually, even with the 70 percent tax relief.
Livingston still needed turbines, however. In 2006, US wind development was booming, and large wind developers had procured all available turbines, driving up their costs and creating a two- to three-year waiting list on orders. Livingston and members of the advocacy groups Utah Clean Energy and the Utah Wind Working Group worked with legislators to craft a new tax incentive bill that would secure a deal with Edison Mission Energy, a subsidiary of California Edison, and that would make Utah attractive to other out-of-state renewable-energy investors.
By fall 2006, Wasatch Wind and Edison Mission Energy came to terms. Edison would take complete ownership of the project to achieve its needed rate of return, but Livingston would continue to assist in finalizing the project. The legislature passed the revised incentives bill in March 2007, and later that spring the project’s redesignation as a community redevelopment area was approved, allowing for the 70 percent reduction on the wind farm’s property taxes for its first ten years in operation.17
At last, in October 2007, Edison broke ground on the gravel pit, and by July 2008 Utah’s first commercial wind farm was producing clean energy for the state.
The four-year struggle to establish Utah’s first commercial wind project illustrates the complex maze of hurdles facing commercial wind power development. The fact that Spanish Fork is now home to one of the most urban wind projects in the nation, however, highlights some important lessons for advancing America’s clean-energy future.
As long as the lights come on and mobile devices get recharged, few Americans think about power losses over long, congested transmission lines or about electricity’s pollution. Clean-energy proponents are now advocating smaller-scale, locally based power generation on what they call the “microgrid”—an integrated collection of rooftop solar panels, microwind turbines on skyscrapers, homes managed by smart meters for efficient energy consumption, and electric plug-in cars with batteries that offer backup energy storage.7 The microgrid will make electricity production on-site, in-sight, and top-of-mind. Consequently, Spanish Fork-style urban wind farms—tapping local resources to sidestep transmission bottlenecks—could become commonplace if siting and resident concerns about local wind farms can be addressed. Here are some lessons drawn from the Spanish Fork experience that could facilitate siting, financing, and public acceptance of urban wind energy.
Manage public concerns. A study by Jacob Glickel identifies three common motivations behind local opposition to wind power development: (1) misinformation (e.g., “wind power doesn’t work”), (2) self interest (e.g., “windmills will hurt my property values”), and (3) prudence (e.g., “windmills threaten wildlife”).18 As evidenced by the Spanish Fork wind project, some local concerns about wind energy may be legitimate, and addressing each type of opposition warrants a unique strategy. For example, potentially irrational arguments founded on misinformation need to be addressed head-on with educational outreach about wind power’s benefits and risks.19,20 Town hall meetings with experts and people living near wind farms can help address common wind power myths and fears, as well as educating residents about how legitimate issues can be resolved. Wind developers and advocates may also sponsor bus tours to active wind farms so that people can experience them up close and form their opinions based on firsthand knowledge.
To address self-interest objections, developers need to promote the compelling benefits of local wind development and provide “compensation” for community acceptance (e.g., tax revenues for schools and community services). As in Spanish Fork, wind developers may need to be willing to alter site plans to accommodate concerns and win community support.
The Spanish Fork case suggests that people accept wind energy’s benefits but oppose local development because they don’t trust the people managing the risks. In Spanish Fork, residents objected to the city’s seemingly “liberal” zoning ordinance that allowed turbines to be sited so close to homes, and they were frustrated that they weren’t consulted. The residents’ board appointed by Mayor Thomas reviewed best practices from other communities and wind industry associations and identified a more acceptable site for the wind project. The lesson here is that, to build mutual trust and avoid costly setbacks, the public should not only be informed but be involved with the siting and approval process. Most city councils are part-time governing bodies with limited time, expertise, and resources. When a wind project is proposed, elected officials often face a steep learning curve, and community input is helpful. Indeed, in Spanish Fork, the opponents of the project on the three-member citizen board became supporters, believing they had set an important precedent for how future wind projects should be sited in Utah.
Encourage policy certainty. Some of the most significant hurdles facing the Spanish Fork wind project centered on altering state and local government regulatory policies to accommodate wind energy (e.g., siting, pricing, tax incentives). Ironically, policies designed to encourage renewable-energy development can ensnarl proposed projects (e.g., PURPA’s avoided cost regulation).
The policy incentive of choice at the federal and state levels for commercial renewable-energy development has been tax credits.21 As experienced with Spanish Fork, however, tax credits have two flaws. One, they can expire. And two, tax credits only benefit companies that have significant tax appetites. Because start-up wind developers like Wasatch Wind often can’t absorb all the tax credits directly, they must team up with big corporate partners that can. If tax credits are restricted to in-state companies, as Utah’s initial incentive package was written, potential out-of-state partners may look elsewhere to invest. The lesson from Spanish Fork is that existing laws and regulatory policies may need to be updated and given longer terms before sunsetting, thus signaling greater “wind friendliness” and planning certainty for developers.
The Obama administration has made renewable energy a national priority, with grants, loan guarantees, and direct investment by the US Department of Energy via the American Recovery and Reinvestment Act of 2009.22 Additionally, 29 states and the District of Columbia have instituted renewable energy standards that require that a portion of the state’s electricity come from renewable-energy sources (another five states, including Utah, have voluntary goals).23 Such federal and state policies create market certainty for wind development, encouraging utilities to add renewable-energy resources. In turn, this market demand encourages turbine, blade, tower, and other supply-chain manufacturing and services to set up shop domestically and boost local economies.
Despite federal and state support, however, make-or-break decisions about renewable energy projects are ultimately made in the chambers of city councils and in town hall meetings. Successful renewable-energy development requires building both local social movements and local markets. Wind entrepreneurs and advocates must engage communities to win local support.
Engage the community. Grassroots supporters in the Spanish Fork community were key to the project’s success. Local school district administrators who recognized that the increased property tax revenues from the project ultimately would benefit school children became pivotal supporters, even agreeing to a significant property tax reduction for the first ten years. The lesson here is that developers and advocates need to link up with like-minded citizens, community leaders, and local administrators to champion clean-energy projects throughout the community.
The more visible and celebrated a wind project’s contributions are within the community, the more local support it can achieve. For example, in September 2008, the city of Spanish Fork spent some of its first proceeds from the wind project to celebrate its opening with the Sky Spectacular kite and wind festival. The event featured professional kite entertainers, crafts, food, and renewable-energy exhibits. Over 20,000 people attended. Since then, the wind festival has become an annual event in Spanish Fork, celebrating its status as the first city with commercial wind power in the state.
Edison later built a roadside kiosk and rest stop for the curious public, who often stop to gaze at the spinning turbines. The kiosk features information about wind power and gives an overview of the school-funding, economic, and environmental benefits of urban wind power. The wind farm has become a visible, iconic part of the community.
The Spanish Fork wind project transformed a dusty gravel pit into a small-scale urban wind project of nine turbines. The project’s construction added $4 million to Utah’s economy; it provides hundreds of thousands of dollars a year in land lease payments, property tax revenues, salaries, and other state-level economic impacts. The US Department of Energy’s National Renewable Energy Laboratory honored Livingston with the Carpe Ventem Award for his victory as the first to “seize the wind” in Utah. As one of the first urban wind farms in the nation, Spanish Fork may provide a path for changing attitudes about local wind development for a cleaner, more sustainable future.