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United States

Illinois utility breaks ground

A small and predominantly rural electric utility in western Illinois broke ground last month to begin construction of a lone NEG Micon 1.7 MW turbine near Pittsfield. The Illinois Rural Electric Cooperative, which has just 7500 members, says it will complete the project in spring 2005 regardless of action by the US Congress to extend federal tax credits.

The utility's general manager, Bruce Giffin, says the co-operative has garnered enough grant money to reduce project costs and that it does not need either the production tax credit (PTC) or the renewable energy production incentive (REPI), which is available to non profit organisations who have no tax base for utilising the PTC. A $438,000 grant from the US Department of Agriculture through its latest farm bill appropriation, a $250,000 state grant from the Illinois Department of Commerce and Economic Development and the sale of the green attributes from the turbine to the Illinois Clean Energy Foundation offsets nearly half the cost of the $1.7 million project.

"The project doesn't live or die on the tax credit," he says. The grants are also enough to bring the cost of the power from the turbine down to just a "hair" less than the wholesale price the utility now pays for energy. "To do this, the production costs need to be in the vicinity of $0.025/kWh electricity," he says. "If we can use the renewable energy resource in an economical way, we should do it."

Non-profit co-operatives are normally not eligible for the PTC, but they can use money from an annually funded REPI program. Congress is unlikely to refund the REPI, however, without extending the PTC. In addition, Giffin points to the most recent Senate version of the PTC, which would allow the co-operative to trade the federal tax credit to an entity that can make use of it.

The utility has been monitoring the wind availability on a 15-mile long ridge in Pike and Adams counties for nearly two years. The ridge, which has room for up to 200 large turbines, is between the Mississippi River and the Illinois River. Construction is by American Vestas Wind Systems.

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