Highland New Wind gets close to securing deal with investors

MONTEREY — Highland New Wind Development continues to negotiate with investors for the company's proposed 39-megawatt commercial industrial wind facility in Highland County, but a deal has not yet been struck.

John Flora, attorney for Highland New Wind Development LLC, delivered a project update to Highland supervisors Tuesday. HNWD owner Henry T. "Mac" MacBride attended the meeting, but did not address the board.

"I have every reason to hope that we will actually have

something signed yet this week. We are that close. We are talking to a smaller group of interested parties at this time," Flora said.

The potential investors are debating various lengths of due diligence — the time frame allotted to buyers to evaluate a business transaction before closing the deal — and this deliberation period could cause HNWD to come before the board next month with nothing new to report.

"I will likely not have much for you next month, but we might have an announcement before the next meeting," Flora said. "We remain very optimistic about where we are. We are still looking at a 2009 construct."

HNWD did obtain permits from the Virginia Department of Transportation for two entrances to the site, and will sign the interconnection agreement with Allegheny Power this Thursday, Flora reported. The agreement will divide the facility responsibilities for things like substations and specs to either Allegheny Power or HNWD.

Supervisor David Blanchard asked what the wind industry's response was to the possibility of decreased subsidies.

The wind industry's hopes for an extention on the federal production tax credit have been bolstered by the recent offshore drilling proposal presented by a bi-partisan senate group of five Republicans and five Democrats, Flora explained. The group, nicknamed the Gang of 10, is negotiating for offshore drilling to revitalize the nation's energy plan. The plan includes continuing the production tax credit scheduled to expire at the end of this year. Extending the per-kilowatt-hour credit for wind turbine operators would preserve a vital wind energy subsidy, he said.

Flora reiterated statements he made last month, saying wind energy development continues to grow in the United States. The major influx of interest in the industry is coming from the Europeans, Flora said, and they are focused on U.S. development because it is more affordable here.

Blanchard also asked if the industry was leaning toward larger turbines in general.

A 2.5-megawatt turbine will remain the industry favorite for onshore development because it is the maximum viable size for these projects, Flora said. Research suggests larger size turbines are suited for offshore development.

Supervisor Robin Sullenberger agreed with Flora's assessment of the escalating interest in wind as an alternative energy source.

"We are continuing to get inquiries about economic development about wind energy, and alternative in general; in fact, we had our yearly board meeting and the program was all about alternative energy, various kinds," Sullenberger said.

Board chairman Jerry Rexrode noted the HNWD project received media attention in this past Sunday's edition of the Washington Post.

"Energy is a hot topic, no doubt about it," Flora agreed. "You don't hear anything about health reform in this country anymore; all of sudden, it is all energy."