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Shifting winds at Bureau Valley

MANLIUS — When the Bureau Valley School District built its wind turbine back in 2005, the administration and board members were optimistic about how much money it could save the district.

When the board approved the turbine in June 2004, board member Keith Bolin said that even with making loan payments on the turbine, the district could save $30,000 to $50,000 per year.

But after the first full year of operation, those profits hadn’t been seen.

“It’s just a wash this year,” said then-Superintendent Terry Gutshall after the first full year of operation. “Gross: $70,000. Net: It’s a wash.”

Today, after almost eight full years of operation, the situation hasn’t changed much.

“The turbine has the potential to be helpful,” said interim Superintendent Dennis Thompson Tuesday. “But right now, it’s closer to breaking even.”

Thompson recently created a report showing a summary of energy costs and the impact of the wind turbine dating back to 2001. He said he created the report following a recent Freedom of Information request from a group regarding financial information about the turbine.

“The question has been raised,” Thompson said. “But it’s kind of hard to figure out.”

For the 2001-02 school year, before the turbine, the district paid more than $142,000 for energy at the high school. That figure peaked at $148,000 for the 2002-03 school year, and then dropped slightly in 2003-04.

The first savings became apparent in 2004-05. The wind turbine was operational for part of the year, and the district only paid $97,000 in energy costs. That figure was the difference between the total bill and any credit the district received for the production of energy. In 2005-06 the district paid $61,000 for its energy, and that figure has ranged between a high of $75,000 in 2011-12 to a low of $44,000 to 2007-08.

Part of the problem is the district is paid at a lower rate for the electricity than it is charged for using it.

“We produce about as much as we use,” Thompson said.

Last year the high school used 946,000 kilowatt hours and the turbine produced 930,000 kilowatt hours. But the electricity can’t be saved, so any excess produced during vacations or at night is sold for one price, and then must be purchased when needed for a penny or two more.

There are other expenses involved with the wind turbine.

The cost of the project was about $1 million. Grants financed part of the effort, and the entire district paid $122,000 toward the wind turbine.

The remaining $450,000 was put on a bank note. Payments on the note began in 2004 with an annual payment of $53,000. That annual payment increased to $55,000 in 2008. The last payment on the bank note will be made in the 2014-15 school year.

Also, beginning in 2004 the district began making annual insurance payments, starting just less than $8,000 annually and reaching $8,900 in 2011-12. Maintenance payments also began in 2004 and have ranged from $11,000 in 2011-12 to $4,900 in 2009-10.

Thompson said there are several factors that have chewed away at the projected profits.

One factor was the discovery of oil and natural gas in North Dakota several years ago. The board had projected electricity rates to increase, but the opposite happened. Thompson said electricity had cost about 7 cents per kilowatt hour, but that price has dropped to 5 cents, an almost 30 percent drop.

That’s both good and bad news for the district.

“It makes our purchase cost less, but the value of what we do produce is also less,” he said.

Thompson said there was also an anticipation the turbine would be producing more electricity than it has so far. Part of that problem is mechanical. Thompson said if the turbine stops, someone must manually press the button to restart it, and there’s not always someone available at the high school to do so.

“In this situation of trying to produce as much as we can, it has to be working as much as possible,” he said.

A final cause of the reduction in profits is tied to net metering. Net metering allows energy producers to “net” out the energy drawn from the grid with energy sent to the grid, and pay only the difference.

Thompson said the board hoped to take advantage of such a law if it were passed. Unfortunately, the law was passed, but it didn’t apply to Bureau Valley.

While the hoped-for profits haven’t materialized, Thompson is optimistically looking to 2015, when the district is no longer making the $55,000 payment on the loan, and that money will be added to the profit side of the ledger.

“There are some potential savings in the future when the bank note is paid off,” he said.

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