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MIDWEST COMPANY ADOPTS NOVEL APPROACH TO SELLING TO UTILITIES

Northern Alternative Energy (NAE) of Minneapolis, Minnesota, is testing a new way of doing business by trying to pre-sell wind power to utilities, outmanoeuvring the more usual Request for Proposals procedure for utilities which do not want the hassle. NAE has recently been restructured and is now in the process of raising money for projects it has already signed up for.

A small Midwestern company may go ahead with some 25 MW of contracts tentatively signed with utilities. Ultimately, three projects totalling 18-36 MW may eventually proceed in Iowa and South Dakota. Northern Alternative Energy (NAE) of Minneapolis, Minnesota, is trying to pre-sell 100 MW of wind power to utilities in the Upper Midwest, says company president Greg Jaunich. "It's a novel way of doing business," he says. "We go to utilities who do not want to go through the RFP process. We let them choose the technology."

So far 25 MW has been signed up with utilities in tentative commitments in what is called the Zephyrus project. Construction may go ahead in 1995 on Buffalo Ridge, he says. However, a delay of about two months in construction is likely because of a recent reorganisation of the company. NAE was previously in a consortium with Wind World Inc of Marshall, Minnesota, called Northern Natural Power (NNP). That has now been dissolved and Wind World is under new management. NAE may also go public, says Jaunich. The company needs to raise capital. It has worked on a system of 50% equity, with half of the required sum from investors and half from a loan.

The company built the first commercial wind farm in Iowa at Sibley with Windtricity of California. Nearby, another 9-18 MW may be built with IES Industries Inc, formerly Iowa Electric Light and Power of Cedar Rapids, he says. Construction should start in the late autumn or early spring. Jaunich has previously said the project is at a very preliminary stage.

East of Sioux Falls, South Dakota, a 4 MW wind farm is being proposed to Interstate Power of Dubuque, with construction to start in September, he says. NNP was originally expecting to build a 5 MW project, but Interstate Power announced April 1 that it is seeking 13.7 MW and plans to fulfil it on a first come, first served basis.

If either project goes ahead, the 500 kW Wind World turbine may be used or the Vestas V-39. And a $5 million, 5 MW plant may be installed near Lester, Iowa as a co-development with Wind World, says Jaunich. It would probably proceed next year.

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