SummitWind’s primary advantage to operators is its location; it has some of the highest wind resource available in the U.S. and has a large enough scale (block of land) to justify expenses. It creates an efficiency and focus for early completion compared to other possible projects. It is no small thing that there is good general support in the community. This is not always true in other locations.
Ahead of our schedule, wind plant operators appeared to bid for our project. Our goals in negotiation were to obtain a high paying lease for landowners and for SummitWind’s assets. The second largest wind plant operator in the U.S. met our goals: PPM Energy. We entered into a Project Development Agreement on August 1, 2007. With great pleasure, SummitWind believes we have the highest paying lease in the Midwest.
In 2008, PPM Energy was purchased by Iberdrola Renovables as a U.S. division. Iberdrola (iberdrolarenewables.us) is the world’s largest wind plant owner-operator and a natural gas distribution company. A 70 year old company, Iberdrola is now publicly held. Clearly, Iberdrola wants a stake in our country’s wind assets and is aggressively seeking more. PPM was of great interest to Iberdrola because PPM had a similar business model with experienced and productive U.S. personnel. PPM (now Iberdrola) built the MinnDakota wind plant near Brookings, which is currently expanding.
In the interest of good returns for its Landowners and SummitWind, we negotiated an equitable lease and easement with PPM (Iberdrola) before completing a Project Development Agreement with them. SummitWind has been acquiring its footprint with this lease form; our area extends from Summit to south of South Shore, SD. There Florida Power and Light (now called NextEra Energy Resources) is developing a wind farm also. NextEra’s lease and options are quite different from SummitWind’s.
In the fall of 2007, SummitWind was asked by Iberdrola to expand its footprint from 25,000 acres to 50,000 acres. When we reach 50,000, Iberdrola will select the leased parcels it wants for the first phase (250 MW, 100 to 167 turbines) of the project. Iberdrola will then begin the studies, permitting and siting for those parcels. Leases not selected for Phase One will be assigned by SummitWind to Wahpeton Wind, LLC, which has the same Project Development Agreement with Iberdrola as SummitWind, for Phase Two. We believe that within one to two years after that, Iberdrola will begin the studies, permitting and siting for Phase two. (Wahpeton Wind, LLC is also a Colorado limited liability company established by many of the same owners as in SummitWind, and is intended to serve the same role in Phase Two as SummitWind is in Phase One.)
