An Initiative for Community Ownership of Commercial-Scale Wind Development
We are a group of Manitoba residents who have come together in support of community-based energy development.
Manitoba Government Asks for Our Input
Expression of Interest (EOI) - Released by the Government of Manitoba and Manitoba Hydro in November 2005, the EOI was developed to gather information about interest in wind development in the province.
EOI Response - This February 16 2006 response to the EOI was written by a grassroots group of Manitoba residents, and includes many of the elements on this web page.
Our guiding principles are concern for the environment and support of the economic health of Manitoba’s rural and urban communities.
Our mission is to promote the use and production of renewable, sustainable, and environmentally friendly energy sources within Manitoba in a manner that maximizes economic benefit to the citizens of Manitoba.
We seek to establish a community-based energy development model in Manitoba that disperses the economic benefits of wind energy to the communities in which the wind energy is generated, and ensures that the average person on the street has the opportunity to directly and significantly participate in the benefits of wind energy development in the province.
We propose the development of a cooperative model to achieve our goals. While other community-based energy development models may be viable, we believe that the cooperative model best achieves the stated policy goals of the Province. Our cooperative will be created with share capital established to provide an opportunity for its members to participate in community-based alternative energy projects. Members of the cooperative will have an opportunity to purchase preferred shares (“flow through shares”) in the project, thereby receiving patronage dividend distributions while contributing to the generation of green renewable electric power generation in Manitoba. Membership in the cooperative will also contribute to awareness raising, events and publication of information to members and the public at large about the benefits of renewable energy.
Other Canadian Community-Based Energy Cooperatives
WindShare is Canada's first share capital cooperative, formed in 2002, and manages the 750kW wind turbine in downtown Toronto.
Positive Power Co-op is a not-for-profit cooperative dedicated to promoting and generating clean, sustainable energy through community-based renewable energy projects and education.
GREEN Cooperative is a share capital cooperative organization incorporated in October 2005 to develop and operate electricity wind turbines in Ontario for the benefit of its members.
Some of the participants in this project are members of the Manitoba Sustainable Energy Association (ManSEA, which can be found at http://www.mansea.org). The ManSEA Executive Committee recognizes that the cooperative model may be viable for Manitoba and wants to use the experience of this cooperative development effort to identify policy development needs that will maximize the ability of Manitoba investors and cooperative ventures to succeed in this sector.
Specific Activities to Move our Proposed Model Forward
We intend to form a cooperative that holds the assets of the wind farm(s) and is structured with a Board of Directors and investors, and allows direct community participation.
The Board of Directors will raise sufficient seed money ($300,000) to launch the formation of the cooperative. This money will be raised through a grant request or through the sale of preferred shares in the cooperative. During the first year of the project, a determination will be made as to the location and schedule for deployment of the cooperative’s first project, expected to be in the rural municipality of Elton. Our membership campaign will determine the size of the projects going forward. If we are able to raise significant investment dollars through the cooperative, and we are able to negotiate favourably with Manitoba Hydro, then additional cooperative projects of significant size could come on-line quite quickly.
We intend to contract with appropriate wind development professionals who have experience in successfully planning, constructing, operating and maintaining wind power generation facilities.
Wherever reasonable, Manitoba equipment and personnel will be utilized in preference to out-of-province resources. We seek to hire a local Project Developer. Local contractors will be employed for the construction of the project where possible. Operations of the project will be managed locally, and maintenance supplies and materials will be purchased from Manitoba manufacturers where possible.
Because our project leverages the cooperative model, it allows any Manitoba resident who signs a membership agreement and pays the membership fee to participate directly in the project. Membership fees will be set low (for example, $10) and preference shares for investment will be modest (likely $500). A maximum allowed investment will be set to encourage broad participation (likely $50,000). The membership share is for voting rights and the preference share is for investment purposes. Energy production is expected to start in 2008. The return on investment is expected to be attractive (10% after the tax shelter benefits). Specific beneficiaries are as follows:
The cooperative model for energy production will improve the market for Manitoba-made components, including the manufacture of turbines, towers, and blades. There is precedent for community-based energy development to directly increase manufacturing to jurisdictions with community-based energy development initiatives. For example, when the Minnesota legislature passed an energy bill in May 2005 favourable to community-based energy development, a major wind turbine manufacturer, Suzlon, agreed to build a blade manufacturing plant in the rural town of Pipestone, Minnesota, bringing 200 full-time manufacturing jobs to the area. Suzlon explicitly stated that the community-based energy development initiative was crucial to their commitment to building the facility.
- Landowners on whose land the wind turbines are sited will receive a lease payment.
- Cooperative preferred shareholders will receive a dividend based on the shares they purchase.
- Communities in which the turbines reside will receive a stipend based partly on the amount of electricity generated. This stipend will be received under the control of the rural municipality’s council to spend in any fashion the individual council sees fit.
- The equity partner will be a Manitoba entity to the extent possible.
- The debt partner will be a local bank or credit union.
We expect the cooperative model in our proposal to improve Manitoba manufacturing by helping to smooth the boom-bust cycle of an external party implementing a major project. For instance, deployment of individual towers and turbines can be paced so that work crew activities can be scheduled to the greatest local economic advantage.
The increased transparency of the cooperative model will clearly show manufacturers how good or bad the short-term and long-term outlook is for wind projects in Manitoba. This will have the affect of reducing uncertainty for manufacturers and workers, as they will know about changes in the market with enough time to adjust appropriately.
Direct job creation is estimated to be a minimum of one full time position for each 10 MW of capacity for maintenance purposes, and possibly as many as many as two positions for each 10 MW, depending on the efficiencies that can be built into the long-term management of the cooperative.
The initial proposed project is located in the Rural Municipality of Elton, with its centre at Forrest, approximately 6 miles North of Brandon. There is landowner support along a major transmission line (Brandon/Neepawa, 230/115 kV) of approximately 6000 acres. More information about the specific site layout will be made available once the Project Developer is selected and has had a chance to analyze the specific available property more thoroughly.
The sequence of development will be as follows:
- We will seek support of the project by Manitoba Hydro through Manitoba Hydro’s Expression of Interest process. We seek to work in partnership with Manitoba Hydro to most effectively deploy a cooperative model compatible with the common interests of Manitoba Hydro and the citizens of the province.
- We will seek support of the project by the Province in order to identify and overcome barriers. These barriers may include legal concerns (e.g. ensuring necessary certificates to go public for investment purposes), financial concerns (e.g. ensuring tax-advantaged status of the project), political concerns (e.g. ensuring equitable distribution of projects across Manitoba) and technical concerns (e.g. ensuring specific interconnection issues are resolved in a timely fashion).
- We will establish an initial Board of Directors.
- The Board of Directors will raise $300,000 in seed money to launch this project. Those initial dollars will be used to (a) develop a request for proposal (RFP) to solicit an appropriate Project Developer and enter into a contract with that Project Developer; and (b) cover year 1 costs required to launch the cooperative. Specific year 1 costs totaling the $300,000 are: development of the RFP for Project Developer ($5,000), development of the land option agreement ($65,000), development of the business structure ($70,000), development of the technical feasibility study including wind measurement ($70,000), land lease payments ($1,800), legal and accounting fees ($40,000), coop director fees ($6,000), coop staff and operating expenses ($10,000), project management ($20,000), and working capital and contingency ($7,200). $300,000 is the amount GREEN Coop required in year 1 to form a similar coop in Ontario, described at http://www.greencoop.ca.
- The Project Developer and other contractors as defined by the Board of Directors will determine the scope of the cooperative’s activities over the first 5 years of operation. This will include specifying the location, size and deployment schedule of specific projects initiated by the cooperative.