Saturday, April 29, 2006

Officials hope NorthWestern deal will boost wind power

Officials hope NorthWestern deal will boost wind power

SIOUX FALLS, S.D. -- The Australian company buying NorthWestern Corp. is one of the world's biggest players in wind farms, and officials hope that will translate to greater renewable energy opportunities in the region.

Sioux Falls-based NorthWestern announced Tuesday it has agreed to be acquired by Babcock & Brown Infrastructure of Sydney, Australia, in a cash deal worth $2.2 billion.

Bob Sahr, chairman of the South Dakota Public Utilities Commission, met with company officials this past week to discuss the deal. Sahr said most of the questions focused on the company's commitment to the state and its utility customers, but he did ask whether there would be a connection between the utility and Babcock & Brown's other ventures in wind power and transmission lines.

"They indicated that they were intrigued by South Dakota's wind power potential, that they knew it was one of the best in the world, but they would evaluate it on a case-by-case basis and look for projects that would make sense," Sahr said.

Babcock & Brown officials made similar statements to Montana officials during a meeting in Helena.

Tristan Peniston-Bird, a spokesman for the company, said there are no existing plans to build wind farms across South Dakota, but such opportunities would be considered.

"It's not that they plan to or are, but certainly it's something they would certainly consider, whether it would be BBI directly or NorthWestern would draw on BBI's experience in doing so," Peniston-Bird said.

One of Babcock & Brown's wind projects sits on tribal land, and that's encouraging to Pat Spears, president of the Rosebud-based Intertribal Council On Utility Policy.

Babcock & Brown partnered with GE Energy Financial Services to invest in a wind farm on the Campo Indian Reservation near the California-Mexico border. The 25 turbines, which started turning in 2005, generate 50 megawatts of electricity for customers in nearby San Diego. The tribe makes money on its land-lease contract and royalties.

Spears, who helped put the first tribally owned wind station on Indian land in 2003, said he hopes the company will consider tribal ventures when looking at wind power development in South Dakota.

"You would hope that new investment and new ownership would explore all of their avenues for wind energy development, and certainly including those on tribal lands that we're working on," said Spears, a member of the Lower Brule Sioux Tribe.

The Rosebud Sioux Tribe's single 750-kilowatt turbine at its casino south of Mission can power 220 homes, and it's currently looking to expand the project into a 30 megawatt wind farm near St. Francis.

The utility council owns a majority interest in NativeEnergy, a privately held American Indian energy company. NativeEnergy and the council hope to build a series of small 10 megawatt wind farms on reservations across the Dakotas and Nebraska to create new revenue streams for the tribes.

Spears said the biggest challenge for tribes is finding a way to get the electricity to potential customers.

"Transmission capacity is limited out of South Dakota and North Dakota," he said. "That is the issue to move it to the urban markets."

Spears said he's hoping to get tribes and states behind wind energy development and request the federal government to fund a good transmission study.

Babcock & Brown Infrastructure has a 16.5 percent interest in Babcock & Brown Wind Partners, which has stakes in 15 wind farms in Australia, Europe and the United States, including:

--Two wind farms in Nolan County, Texas, with 86 turbines producing 129 megawatts to customers of TXU Energy and Austin Energy

--An 80-turbine wind farm in New Mexico, generating 80 megawatts of electricity for energy customers in the state

--A 45-turbine farm near Lawton, Okla., which generates 74.25 megawatts for Western Farmers Electric Cooperative members

--A 41-turbine farm in northeastern Oregon that sends 41 megawatts of energy to PacifiCorp customers