Tri-State Neighbor: South Dakota Farm Newspaper

The 100 wind turbines that make up the MinnDakota Wind Power Project generate a lot more than renewable energy.

The 15,000-acre project generates an income for landowners, agriculture producers and rural communities in Brookings County, S.D., and Lincoln County, Minn.

“The project will directly generate hundreds of thousands of dollars in economic benefits through payments to landowners, increased receipts for local governments and jobs to maintain and operate the wind facility,” said Sen. Tim Johnson, D-S.D. “Renewable energy production requires harnessing natural resources and it is the farmers and ranchers of South Dakota that can directly benefit from harnessing the untapped energy of the land, wind and sun for energy production.”

Generating more than 150 megawatts of energy, MinnDakota Wind Power Project is projected to provide enough energy to meet the annual energy needs of 58,000 homes, according to Xcel Energy. Xcel Energy spearheaded the project when it contracted with Iberdrola Renewables to purchase the energy generated by the project. The project was completed in January.

“Xcel operates an integrated generation and transmission system. All customers in a five-state region benefit from low-cost nuclear power, wind power and coal,” said Jim Wilcox, manager of government and regulatory affairs for Xcel Energy. “Xcel Energy has a long commitment to renewables that goes back 15 years. We are very environmentally conscious and recognize that renewables have a positive effect. When we can do it economically and reliably we are very happy to include wind energy in our mix.”

Energy diversity is a good way to keep energy affordable for South Dakotans says Dusty Johnson, a South Dakota Public Utilities commissioner.

“We want our energy mix to be diversified - just like people should be diversified in their investments,” Dusty Johnson said. “We don't want all coal, all nuclear or all wind. A good mix helps isolate you from risk.”

He adds that contrary to popular belief, wind power isn't free, however, he sees it as an important part of South Dakota's energy future.

“The project is great news. We can't power our whole state with wind power, but we should be powering our state with more wind power,” he said. “It's good news for landowners who get annual payments, good news for electricity customers because we are integrating it in a way that makes sense and doesn't increase their payments. It makes good environmental sense and good economical sense.”

Iberdrola Renewables is one of the leading wind energy providers in the world. Headquartered in Bilbao, Spain, the company chose the land in Brookings and Lincoln counties for their wind farm based on the amount of wind generated in the area.

“As you might imagine, we go where the wind is,” said Paul Copleman, communications manager for Iberdrola Renewables. “When we describe the development process, first and foremost we are looking for that consistent wind resource.”

Yielding the benefits of wind

Wind is one resource that John Leiferman knew he had plenty of. Enough, that wind inspired the name he and his wife, Sharon, gave to their ranch near White, S.D. - Windy Ridge Ranch.

A second-generation farmer, Leiferman says his dad originally bought the land where he and his wife now run a 500-head cow/calf and feeder operation, not for its fertile soil, but because the windy ridges provide inexpensive pastureland.

After seeing several wind turbines go up just across the state line from his ranch, Leiferman began calling a variety of wind energy companies trying to sell his abundant resource. Finally, about seven years ago, Iberdrola Renewables said they were interested.

“I had been calling different companies starting about 10 years ago,” Leiferman said. “I contacted a guy and he said for me to e-mail my tracks of land saying that maybe they would expand to South Dakota. After we e-mailed the tracks of land they approached us and said we had a great location and said they wanted to fly out from California to take a look.”

To prepare for the meeting with Iberdrola Renewables, the Leifermans referred to www.windustry.org. A Web site dedicated to informing landowners thinking about leasing their wind rights to developers like Iberdrola. The couple printed off a list of 100 questions, sat down with the representatives and drew up a contract.

Iberdrola Renewables paid the Leifermans a set rate per-acre during the development stage. Once construction began on the turbines and service road, they received an installment fee. When their turbines are operational, they will receive a yearly base rate - whether the turbines are running or not - and a royalty fee based on the amount of energy their turbines generate. According to Copleman, the average yearly lease rate on a turbine is about $5,000.

The Leifermans signed a 30-year contract with the company. Every five years they will receive a cost-of-living rate increase.

“Here is an income that wasn't based on ag at all,” Sharon Leiferman said. “It didn't matter what crop prices were. It didn't mater what cattle prices were.”

Rep. Stephanie Herseth Sandlin, D-S.D., says that she has been impressed with the working relationship Iberdrola Renewables develops with landowners.

“The MinnDakota project was very respectful of private landowners and partnerships with ag producers ... they demonstrated that any agriculture production, crops and livestock production, will not be negatively affected,” Herseth Sandlin said.

Copleman says that of the 15,000 acres the company leased for the MinnDakota project, only 2 percent of the land is impacted.

Where will the wind take us?

At it's peak, construction of the MinnDakota Wind Power Project provided more than 250 construction jobs. Now that the project is complete, the wind farm provides 10-12 permanent jobs.

Al Heuton, executive director of the Brookings Economic Development Corporation, says that these jobs, along with increased tax revenue and the income it provides to landowners will have a significant impact on the community of Brookings.

“It's an excellent way to help diversify the economic base in the region,” he said. “One difference that I see from this project compared to other industries is that we are able to keep the land in production. It provides an alternative economic resource for agriculture producers and provides a clean industry and clean energy for the region.”

Iberdrola Renewables' regional office will be among the first tenants to locate in the new South Dakota State University Innovation Campus. The university-related research park is currently under construction. It was developed to promote university research and development through industry partnerships. Teresa McKnight, CEO and executive director of the SDSU Innovation Campus, says that Iberdrola Renewables is a perfect fit with the campus' mission.

“They are involved in renewable energy and there is so much renewable energy research happening on the SDSU campus right now,” McKnight said. “Working with an international corporation like Iberdrola Renewables gives the Innovation Campus a global connection in the early stages of our development.”

Sen. John Thune, R-S.D., says that renewable energy projects like the MinnDakota Wind Power Project are good for South Dakota's future.

“Renewable energy projects like wind farms are our future,” Thune said.