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Canada

Canada

Starting community ownership

Canadian Agra Corporation (CAC) is seeking to develop a people's co-operative to finance, construct and own a 5-10 MW wind farm in the shadow of Ontario Hydro's Bruce Nuclear Power Development on Ontario's Lake Huron shoreline, one of the windiest locations in the province. CAC vice president Philipp Andres says the co-operative concept is unique in North America but resembles schemes in Sweden, Denmark and Germany. Installation of the first machine could begin on CAC land in winter 1994-95. The co-operative would encourage regional businesses and homeowners to purchase ownership and share the power savings of load displacement electricity. CAC hopes to build the wind farm for about CAN$1400 per installed kilowatt. An additional CAN$500 per installed kW would be charged to investors to compensate CAC for all annual costs incurred over the next ten years, including insurance, operating and maintenance, land rent, and management and administration.

In an April proposal to the Ontario Hydro utility, CAC says participants may purchase up to 70% of their annual electricity consumption from the co-operative and at least 1 kW of capacity. Monthly load profiles will be carefully analysed "to help avoid excess power allocations, so that power will never have to be sold to Ontario Hydro." The publicly owned utility reports a large capacity surplus and currently discourages independent production of power for sale to the grid.

One kilowatt of installed capacity represents about 2500 kWh annually, according to a 1993 CAC wind resource assessment. Owing to the high power densities discovered, CAC predicts a 30% capacity factor for the project. The CAN$1900 investment would reap an estimated 7.5% tax free annualised rate of return from 1994-2003, assuming no rate increases from Ontario Hydro. Now Hydro pays CAN$0.09/kWh. An accounting opinion obtained by CAC states that wind turbine ownership shares would not constitute a business for homeowners and therefore no expenses or depreciation would be deductible for tax purposes. Correspondingly, the reduction in homeowner utility bills through partial self supply of electrical needs will not be taxable. A residual value of CAN$800 per installed kW is assumed at the end of the first ten years. Homeowners would again prepay all annual generating expenses for the next ten years, at rates based on previous operating experience. Hydro tariff increases and long wind turbine design life are expected to further enhance the value of the load displacement investment.

CAC has asked Hydro to provide access to its transmission system and to implement the required individual billing adjustments for co-operative members. The agreement of local public utility commissions would also be required to allow load displacement credits to reach the shareholders. Andres hopes that Hydro will accept "emission allowances" created by the clean power produced by the co-operative as compensation for transmission access and accounting support. Hydro's board of directors recently began considering full cost accounting, including environmental costs.

CAC owns and operates a 18/80 Lagerwey wind turbine imported from the Netherlands which since July 1993 has supplied data to confirm the local wind energy potential. The turbine's output mainly displaces electricity for heating at a CAC building and peaks in winter.

As the co-operative proposal was being formulated, Hydro announced in February that one of the reactors at the Bruce A nuclear station will be prematurely shut down and laid up in 1995. Bruce A supplies steam to the Bruce Energy Centre, where CAC operates an agribusiness complex.

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