Hard decisions will benefit future
The possibility of installing wind turbines in Jamestown has recently become newsworthy. It is important that all Jamestown residents are aware of the background, and what this decision could mean for our future.
In 2007, the Town Council selected the members of the Wind Energy Committee based on their expertise on issues ranging from economics to engineering to law and policy. For more than two years, the committee studied all of the potential impacts of wind energy on Jamestown. The Town Council spent $50,000 to hire expert consultants to evaluate the physical and financial feasibility of wind energy for the town.
Based on this expert analysis and years of study, on Feb. 16, the Wind Energy Committee recommended installing two turbines, with an upfront cost of $10.5 million, and a return on investment of $6.4 million. This includes $1.25 million available in grants from both the state and federal government, including “stimulus” funds, which the Wind Energy Committee also recommended that the Town Council pursue. This plan would place one turbine at Ft. Getty and one at Taylor Point, and by installing both turbines at the same time, the town would take advantage of certain “economies of scale,” which would effectively reduce the per-turbine cost to the tune of $500,000 for the project. There is also the potential for an additional $1.25 million in grants, which would further reduce the project cost and increase the profit.
Given the numbers, there are clear advantages to installing two turbines. The $6.4 million profit would be a significant benefit, reducing the tax burden on all property taxpayers over the 20-year lifespan of the turbines. Also note that this estimated profit is conservatively based on today’s fossil fuel prices. Anyone who pays attention to this market can tell you that prices are rising over time. By installing the turbines, Jamestown will be impacted less by the uncertainties of that market, and might realize an even bigger profit.
In their vote on this matter, the Town Council chose to take the Ft. Getty turbine off the table. With this option, the initial investment would be $5 million, with the profit coming in at $4.5 million. Clearly, this is still a nice profit, but leaves money on the table. First, the grant money available is on a perturbine basis, while installation costs per turbine are reduced when installing two. Also, once the economic analysis is done and the debt service is considered, the difference is about $3 million less that will come back to Jamestown’s coffers.
It would be comforting to consider installing the second turbine after we have had the first running for a few years. Unfortunately, thanks to the economies of scale of installing two turbines at once, there are half a million reasons to make the hard decisions upfront that will benefit the town in the long run.
Abigail Anthony, Ph.D.
Wind Energy Committee