² The cost of capital for investor-owned utilities (IOUs) is typically higher than that for co-ops for two main reasons: the inclusion of higher cost equity in the capital structure of IOUs, and the lower cost of government-guaranteed debt available to co-ops.
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³ Dakota Electric Association is unusual among co-ops in general and unique in Minnesota in that it is rate regulated by the Minnesota Public Utilities Commission. This situation makes DEA more involved with and affected by state policy than the other distribution co-ops on the CP system.
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⁴ Powering the Midwest: Renewable Energy for the Economy and the Environment, Michael C. Brower, Michael W. Tennis, Eric W. Denzler, and Mark M. Kaplan (Union of Concerned Scientists, 1993). Visit the Union of Concerned Scientists at http://www.ucsusa.org.
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⁵ Powering the Midwest: Renewable Energy for the Economy and the Environment, Michael C. Brower, Michael W. Tennis, Eric W. Denzler, and Mark M. Kaplan (Union of Concerned Scientists, 1993). Visit the Union of Concerned Scientists at http://www.ucsusa.org.
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⁶ One idea was using the wastes from livestock feedlots to produce biogas for a small generator. Several co-op managers had contacts with managers of this type of facility and were quite positive about the idea. On the other hand, many of the members of MN SEED could not actively support facilities like this because they perceived them to be "corporate farming" and a potentially troubling source of water pollution. Many advocates are working actively against the trend in Minnesota toward large feedlots which threaten water and air quality and sustainable family farming.
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⁷ The MAPP has developed a statistical method that is used to determined the amount of conventional generating capacity that a wind project can displace. For each month of the year, the output from the wind project on a hourly basis is determined and compared to the hourly load for the utility system purchasing the wind power. Monthly "accredited capacity" calculated in this way, measured in percent of wind farm rated capacity, ranges from 10% during summer months to 40% to 50% during the windier winter, spring, and fall months.
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⁸ For more information on the Traverse City green pricing program, see Edward Holt, Green Power for Business: Good News from Traverse City, Research Report No. 1 (College Park, Md.: Renewable Energy Policy Project, July 1997). You can order it from REPP at (202) 293-2833.
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⁹ In the Traverse City green pricing program, TCL&P chose to own and operate the wind turbine itself rather than enter into a power purchase agreement with a wind developer.
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¹⁰ Ultimately, the CP Board ruled specifically that the wind energy would be procured under contract.
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¹¹ This contract term was probably longer than CP would have preferred due to the uncertainty of both enrollment and long-term participation in the green offering. On the other hand, wind developers typically obtain power purchase agreements for 20 years or more in order to secure loans and investments in projects.
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¹² Two factors were primarily responsible for the lower premium at TCL&P: higher utility avoided costs, (2.4 cents/kWh) and lower project costs due to utility ownership. The municipal utility cost of capital and ability to use 100% debt financing produces the most favorable financial conditions for wind development.
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¹³ 3,750 monthly purchases of 100 kWh blocks is approximately the demand that would be met by 1.5 MW of wind power under local conditions.
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