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Montana town mines the winds for power, revenue

Municipal revenue from the wind picked up last winter in Livingston, Mont., which nestles alongside the Yellowstone River 50 miles north of Yellowstone Park.

The wind check to Livingston (pop. 10,000) from Montana Power Company amounted to $1,212 in January, and $1,387 in February. All four of the 24 -kilowatt (kw) wind generators built by Carter Wind Systems of Burkburnett, Texas, are performing well, after experiencing some mechanical problems last year.

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Wind speeds (which geometrically increase power production as they rise) average more than 24 miles an hour during the winter on the Livingston Bench, the 100-square-mile plateau above Livingston.

City officials predict larger revenues as well as more jobs from the community's wind resource in the months ahead.

A 70-foot sail-turbine generator will be installed late this month by Windpowered Machines Ltd., which moved its manufacturing plant from Illinois to Livingston. The city receives $100 a month from the company for land rental, and will get roughly 40 percent of the revenue, once various construction charges are paid off, if the machine generates electricity, as its 20-foot prototype did.

Ed Stern, Livingston's community development director, foresees as many as 60 wind units in the community by the end of this year, ranging in size from the 10 -kw Jacobs Wind Electric machine operated by an individual to 500-kw units considered by some of the dozen firms attracted to the area.

''We've got the wind, and we're going to make money off it,'' says Mayor Chuck Nicholson. ''There's no way you can wear it out, no smoke, no fumes.''

Ownership of electric utilities by cities and towns is common in most states. Before Livingston started its municipal wind farm last year, all states except Montana and Hawaii had some of the nation's more than 2,100 public-power systems.

Unlike most of these systems, however, Livingston sells the electricity to the investor-owned utility that has served the area for decades.

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Mr. Stern advocates joint ventures between local governments and private firms to develop wind resources.

''City officials can lease or ease public lands without the expense of municipal construction and maintenance,'' he says. ''It's surprising how much land local governments have, such as land they got for taxes or abandoned, outmoded airports.

''Wind royalties fit in with ranching, too. All the wind groups need is about 5 percent of the land, plus the wind rights.''

When he keynoted the American Wind Energy Association annual meeting in Amarillo, Texas, last fall, Mr. Stern invited the wind industry to team up with municipal governments.

Cities and towns, he said, could ''fashion a regulatory climate that can minimize bureaucratic hassles,'' steer prospective developers to public or private land, obtain federal community-development block grants and urban-redevelopment action grants, and provide local or state tax incentives - in addition to offering traditional municipal financing and tax-exempt bonding.

Mr. Stern sees municipal wind energy as a major growth industry that can create thousands of jobs and attract industry while bolstering municipal revenues.

One of the largest firms considering the Livingston area is United Technologies, whose Hamilton-Standard division last year built a wind unit for the US Bureau of Reclamation at Medicine Bow, Wyo. The unit produced up to 4.8 megawatts (mw) of sustained power during tests last winter, and can meet the electric needs of more than 1,500 homes, according to the bureau.

United Technologies official George Walker calls the municipal attitude in Livingston ''very favorable.'' If Livingston officials have their way in the Montana Legislature, which is now in session, municipal and state attitudes toward wind farms will become even more favorable.

Proposed legislation would provide tax credits for new ventures involving the manufacture of wind-generating equipment; new industries that purchase or receive electric power on a direct contract from wind-generating equipment; or production of electricity from wind generators.

The sponsors of the legislation rewrote it to overcome concern among officials in Gov. Ted Schwinden's administration that the original bill would decrease state revenues. Limiting the bill to new wind-generation ventures won the important support in the Department of Revenue.

Montana derives substantial revenues from its coal-severance tax and regularly invests some of these funds in renewable-resource development, such as wind power.

Early this year the state lent $170,000 to American Energy Projects of Palo Alto, Calif., at below-market interest rates to supplement private funds for wind monitoring. The results are to be available to anyone.

Windcraft Industries, a California firm associated with American Energy Projects, is interested in placing 340-kw Danish wind turbines in the Livingston area. Another California firm, Unique Investments, is negotiating in the Livingston area to install 4.5-mw Bendix wind machines.

Livingston's experience illustrates how wind energy has moved from the back yard to the board room.

Before being acquired by Allied Corporation recently, Bendix bought 30 percent of the stock in Enertech, the largest manufacturer of small wind machines in the United States. Enertech is conducting engineering tests in the Livingston area. Control Data Corporation provides financial support for Jacobs Wind Electric, formed by three brothers in eastern Montana more than 50 years ago.

Wind development also has policy implications and revenue possibilities at the federal level. A Denver-based firm, Pan Aero Corporation, received permission from the US Bureau of Land Management (BLM) to install wind units on 1,200 acres owned by BLM on the Livingston Bench.

Fair market value of the wind and tower sites in the Livingston area has not yet been established, but last October's BLM sale of wind rights in choice California locations brought bids ranging from $240 to $2,020 an acre, with Pan Aero and Southern California Edison Company paying top dollar.

As for Livingston, city officials are smiling, because that's where the wind is.

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