Thar She Blows
Originally published in IE Issue #39,
Volume 7, July-August 2001
by Bennett Daviss
A wind energy boom promises to confer wealth
on those whom it has eluded for so long-North America's small farmers
and native tribes.
Charles Goodman is sitting atop an energy
bonanza longer-lived and ultimately richer than Saudi Arabia's.
The energy is pollution-free, less than half the cost of solar power,
poised to edge out natural gas in head-to-head price competition,
Goodman farms 100 acres of seed corn and soybeans outside of Alta,
In a typical year, he'll make $100 to $200 from every acre except
one-the acre where three wind turbines stand, just 600 feet from
his porch. The energy developer that put up the turbines has guaranteed
Goodman a minimum $750 annual royalty from each turbine on the electricity
that winds blowing across Goodman's land generates. He can even
farm right up to the 40-foot-square base of each tower, which takes
a little more than 10% of the acre out of production. Last year,
his one-acre wind farm earned him more than $6,000.
Wind may be the last untapped resource of the
North American heartland. The buffalo are few and fenced, the topsoil
has been tilled, the oil is long gone, and the water rights have
been sold. But the wind that sweeps from the Rockies to the Appalachians
renews itself hour by hour. No one owns it and no one can deplete
That endless, unclaimed resource has sparked a new kind of land
rush. A California-based division of Enron, the natural gas giant,
is leasing land and building wind farms from Washington state
through the American south. Renewable Energy Systems, based in
Austin, is starting to spin turbines across Texas. FPL Energy,
a spinoff of Florida Power and Light, has entered the market along
with dozens of smaller entrepreneurs whose turbines churn out
electricity for power-hungry utilities in a market clamoring for
But the opportunity is particularly rich for Goodman and his neighbors.
Goodman's land sits at the southeastern end of Buffalo Ridge,
a welt of glacial rubble running more than 65 miles from northwestern
Iowa up across the corner of Minnesota to the South Dakota border.
The ridge, rising as high as 1,900 feet above the surrounding
plains, is not only the second-highest point in Minnesota, it's
also just about the only geologic feature that rises into the
winds blowing from Canada and the central Rocky Mountains on their
way to Chicago. According to estimates based on U.S. Department
of Energy figures, the winds in Wyoming, the Dakotas, Iowa, and
Minnesota could generate enough electricity, using existing technology,
to supply today's entire U.S. demand. North Dakota's breezes alone
could feed 36% of the nation's appetite.
Topography funnels a good share of that potential through the
area around Lake Benton, Minnesota, a town that sits at the other
end of Buffalo Ridge from Alta. This hamlet of 703, located in
the state's poorest county, is the hub of what is now the world's
largest single wind farm. "I'd guess that the wind blows
here 325 days out of every 365," says mayor Marlin Thompson,
"and the average wind speed has been measured at 18 miles
an hour. Everyone complained about the dust and the blizzards-until
wind power came along."
The gusts became fair winds in 1994. In that year, the Minnesota
legislature passed a law entitling Excel Energy, the state's biggest
utility monopoly, to build a nuclear power plant and store the
waste on its property. In return, Excel was obliged to invest
in renewable energy.
The result: 281 wind turbines at last count, spread over more
than 50 farms around Lake Benton. The turbines crank out just
under 300 megawatts of electricity-on a good windy day, about
enough to meet the average demand of Minneapolis and St. Paul-at
a cost of 3.2 cents per kilowatt hour. "That's right about
what electricity costs from gas-fired generating plants,"
says local farmer Jim Nichols, a former state senator and twice
Minnesota's commissioner of agriculture. "The next generation
of turbines will bring that down to around 2.8 cents, making wind
power the cheapest electricity you can generate."
Farmers earn an average royalty of 2 to 4%, which fetches them
about $1,500 to $2,000 a year from each turbine. The project plan
calls for about another 100 turbines, and several smaller projects
have sprung up locally to cash in on state tax incentives offered
to investors in wind power projects of fewer than 2 megawatts.
One of the chief beneficiaries of the windfall (other than the
farmer who has 17 turbines on a half-section of land) has been
Lake Benton itself. The project brought 150 construction jobs
to the area and 26 openings for permanent, high-skilled technical
workers to repair and maintain the turbines. The city has completed
a $2.5-million street improvement project, the county has added
$715,000 in property taxes to support its schools (nearly a 50%
increase), and the region has undergone an ancillary economic
"We had eight or ten tour buses coming here every year to
see the plays put on in Lake Benton's historic opera house,"
Thompson says. "Last year, we had more than 40 busloads,
most of them to see the wind farm." Downtown, Lake Benton
has built a 5,670-square-foot "Heritage Wind Power Learning
Center of Southwest Minnesota," complete with a six-foot
working model of a wind turbine and interactive displays. Each
fall, the town also hosts an annual "Wind Fest" to promote
the area and its contribution to the national energy solution.
"It's amazing the number of people who'd stop along the highway
to see the turbines, then drive into town and say, 'What is that
out there?'," Thompson says. "Since the wind project
was built, we have an additional four specialty shops in town
that weren't here, and wouldn't be here now except for tourism
brought by the wind project."
The shops are a symbol of a brighter future, many believe. "Each
megawatt costs about $1 million to build," Nichols says,
"which makes this a $300-million project built without government
money other than tax incentives. We have a lot of construction
jobs, higher farm incomes, and new property taxes to improve our
schools. We can educate our kids and provide them with a chance
for good, well-paid jobs when they graduate. Our county has been
losing population, struggling to survive. Keeping money here will
help us keep our young people here."
Having sniffed potential wealth in the wind, some farmers have
begun to take steps to eliminate middle-man developers. A few
farm communities, such as Worthington, Minnesota, on the Iowa
border, have begun to put together municipal utilities to buy
and distribute wind-generated electricity from nearby farms. Several
groups of farmers are pooling their savings to form limited liability
corporations and build wind farms that they'll own themselves.
"This is a chance for us to keep this money in our local
communities for additional economic development," says Tom
Arends, who raises corn, soybeans, and hogs on 2,000 acres near
Luverne, Minnesota, about 50 miles south of Lake Benton. Arends
is part of a 30-member LLC hoping to raise capital to build a
1.9-megawatt wind farm. "Right now, that money waves bye-bye
to us as it travels down the transmission line."
To cash in, farmers are abandoning the legal structure of the
rural electric and producers' cooperatives that have shaped much
rural development in the past. Corporations not only avoid some
of the regulatory obstacles that cooperatives pose to farmers
planning wind projects, but also put more money in shareholders'
pockets. "Structuring our venture as an LLC lets us take
advantage of tax credits available to investors in small wind
projects, which wouldn't be available to co-op members,"
Arends explains. "Without the credits, we'd make about a
10% annual return. With them, we'll make about 17%."
The group is negotiating with area utilities that might purchase
the power from the planned project. With a power purchase contract
in hand, the LLC expects to be able to collateralize a construction
loan. "A royalty of $1,500 or $2,000 is peanuts compared
to what we can earn if we own it ourselves," Arends adds.
"We already have farmers knocking down the door to get into
the next LLC. After that one, we'll keep putting together as many
as we can."
They won't be working any faster than the continent's native tribes.
Indian country is home to some of the gustiest spots on the plains.
Montana's Blackfeet have been looking for a way to turn those
breezes into cash for more than five years. The tribe negotiated
with a few developers, but found them reluctant: Indian lands
are owned by the tribe but held in trust by the federal Bureau
of Indian Affairs. Any leases or other kinds of land-based deals
have to be walked through, and approved by, the Washington agency.
In 1999, the tribe talked with SeaWest WindPower, Inc., a private
San Diego wind developer that has built projects on three continents.
"The company was open-minded about our needs and willing
to work through some of the regulatory aspects," says Dennis
Fitzpatrick, general manager of Siyeh Development Corp., the tribal
organization managing the wind project.
No turbines are spinning yet, but already the project has expanded
its scale. Originally, the Bonneville Power Administration agreed
to buy about 25 megawatts from the project. But with regional
demand rising, and after discovering more unused capacity than
it thought in nearby transmission lines, the BPA is ready to take
from 36 to 66 megawatts.
At first, the tribe will collect lease payments and a royalty-but
it's not willing to settle for that. "Under current tax law,
it's hard for any tribe to be an equity owner in a project like
this," Fitzpatrick explains. "Because the tribe is a
sovereign government, it's not able to take advantage of IRS tax
credits for renewable energy. Those credits are a large part of
what makes a wind project work economically today in our area."
The tribe is talking to the U.S. Department of Agriculture's rural
utility service about low-cost, guaranteed financing. Also, the
Blackfeet's contract with SeaWest includes the right to buy into
the project in the future.
But that's only the beginning. SeaWest will train tribal members
to repair and maintain the turbines, and the tribe is working
to include some of the technical courses in the local community
college's curriculum. With Glacier National Park next door to
the reservation, the tribe also expects the wind farm to attract
tourists-who, in turn, will need places to eat and stay.
"We're looking at the project as a way to attract businesses
to the reservation, such as electronic assembly, that use a lot
of electricity and need a steady, reasonably-priced supply,"
Fitzpatrick says. "This is an economic development tool."
Farther north, the Piegan tribe in southern Alberta has done the
Blackfeet one better. It's created the Piegan Indian Utility Corporation,
the continent's first Indian-owned utility.
"We want to be assured that our needs are being met,"
says William Big Bull. "The only way we can do that is if
we have the control we need to make decisions."
Big Bull is coordinating the tribe's Weather Dancer wind project,
a partnership with Epcor Energy Services, an Alberta utility.
The project put up the first of an expected 100 turbines in August,
with the partners planning to install as many as 200 more over
the next several years. Epcor will buy the electricity under a
ten-year contract, renewable for an additional ten The company
also is financing Weather Dancer, of which the Piegan nation will
The partners estimate that a 100-megawatt wind farm would spin
out about $15 million in annual revenue, with $7.5 million going
to the tribe and its 3,025 members. "We also have the right
of first refusal if our partner decides to sell its share,"
Big Bull adds, "so at some point we could own 100% of the
Even before the first turbine is in place,
the project has delivered benefits. The economic value of the
tribe's 2,027 acres slated to host the turbines has doubled, from
about $40 an acre under agricultural use to more than $75 as a
wind site. (Because the land is owned by the tribe, no private
landowners' interests have been displaced.) The joint venture
also has broken legal and regulatory ground that other Canadian
tribes can use to set up their own wind partnerships and utilities.
The tribe hopes to use its newfound power-financial as well as
electrical-to build smaller, tribally-owned wind farms to supply
electricity to the reservation. "Our goal is to have at least
50% of our own power supplied by the wind," Big Bull says.
Those projects also could attract industry, perhaps even a plant
to make turbines and the towers that support them. "There
are jobs tied to this," Big Bull says. "There's tourism,
possibly manufacturing. We won't know what all the potential benefits
are until the project is farther along."
An early benefit, however, is a new sense
of the tribe's power. "We aren't depending on the government
to make this happen," Big Bull points out. "We're using
our own resources to become independent. This proves that we have
the ability to become a player in a market driven by private corporations."
Those who live in North America's windy places have earned the
chance. "We've been in the right place for wind for a long
time," Big Bull says. "Now, thanks to improved technology,
it's also finally the right time."