PSC orders financial pledge for cost of reclaiming wind farms
BISMARCK — In a first for the state, the North Dakota Public Service Commission has required a wind farm owner to provide financial assurance that it can cover the future costs of reclaiming the site when the wind turbines reach the end of their lifespan.
“These are huge, imposing things covering thousands of acres, and I really feel good that we’ve taken the next step to ensure they’re going to restore the land,” Commissioner Randy Christmann said.
The decision puts wind power firms in a similar situation as coal mine operators, except that where coal companies must post a reclamation bond before being permitted by the PSC, state laws doesn’t require wind farm operators to post a guaranty until after their 10th year of operation.
Last September, the PSC sent notices to the owners of four wind projects that had reached the 10-year mark.
“The first chance we had, we reviewed it, and it seemed like the right thing to do,” PSC chairman Brian Kalk said of requiring the financial assurance.
The three-member panel voted unanimously Tuesday to order NextEra to file a corporate guaranty of $2.23 million to cover its estimated decommissioning costs at the 27-turbine North Dakota Wind LLC project near Edgeley and Kulm, and another $1.13 million guaranty for the 14-turbine North Dakota Wind II project in the same area.
Both wind farms began operating in October 2003, when the company was known as FPL Energy. NextEra estimates they have a 35-year lifespan.
The other two projects that came up for decommissioning review last year were Minnkota Power Cooperative’s Infinity Wind projects that consisted of single turbines that went online near Valley City in January 2002 and near Petersburg in July 2002. The PSC decided not to require a corporate guaranty for those demonstration projects.
The decommissioning process includes dismantling and removing the towers, turbine generators, transformers and overhead cables, removing the foundations to a depth of 3 feet and restoring and reseeding the topsoil.
Commissioner Julie Fedorchak said the PSC looked at requirements in other states and those imposed on the state’s coal industry before deciding to require the financial assurance from wind farm operators.
“We reviewed this issue thoroughly and reached a good balance that protects the public and our landscape without creating significant new burdens or excessive costs on the companies,” she said in a PSC news release.
North Dakota went from having no commercial wind turbines in 2000 to currently having 991 turbines with 1,672 megawatts of wind-power capacity, according to PSC figures. The next wind farm that will come up for a PSC decommissioning investigation is an 18-turbine farm near Velva that began operating in 2005.
Kalk noted that state law is silent on the issue of when the PSC can release the bonds, and the PSC will likely have to create a set of criteria that must be met before doing so. NextEra will have to file updated decommissioning cost estimates by Jan. 1, 2020, and keep the PSC apprised of any changes in its bond issuance ratings.
“I would say this is a very big first step in the wind reclamation, but there’s certainly a lot left to be done,” he said.
Christmann, a former state lawmaker, said he wouldn’t be opposed to the Legislature requiring an upfront guaranty from wind operators as it does for coal companies.
“We’re still, I think, giving the wind industry a pretty good break on this,” he said.
Nowatzki is a reporter for Forum News Service. Contact him at 701-255-5607 or by email at email@example.com.